(EnergyAsia, February 25, Wednesday) — Australian upstream company Santos Ltd its 2008 net profit rose 40% to A$1.7 billion, helped by a A$1.2 billion profit for selling a 40% in the Gladstone liquefied natural gas (LNG) project to Malaysia’s state oil firm Petronas. (US$1=A$1.55).
Earnings were also lifted by a brief spurt in oil and gas prices, which fell back in the fourth quarter. Sales revenue rose 11% to a record A$2.8 billion.
Australia’s third largest oil and gas company said it has a strong cash position, with reserves of A$1.6 billion and a gearing of just 10%.
Santos said its solid financial results in 2008 were built on the strong performance of Santos’ base businesses in Australia and Indonesia. This has enabled the company to continue to develop its LNG growth projects, strengthen its balance sheet and maintain the final dividend to shareholders, despite the impact of the global financial crisis.
Santos said it will pay a final dividend of A$0.20 per share, boosting total dividends for 2008 to A$0.42 per share, up 5% from the previous year.
CEO David Knox said: “2008 was defined by delivery from the base business and Santos’ progress on our LNG growth strategy. Both the GLNG and PNG LNG projects achieved significant milestones during the year. We look forward with confidence to working with our partners towards the sanction of both projects.”
Executive vice president and CFO Peter Wasow said: “Santos enters 2009 with a strong balance sheet. It is reinforced by a cash balance of A$1.6 billion, which positions us well to execute our growth strategy despite the current disruptions to global capital markets. We will manage our cash prudently, focussing every dollar to ensure our strategy is executed.
“The company has a long debt maturity profile which provides great flexibility: less than 15% of gross debt matures in the next two years and greater than 25% matures beyond 10 years.”