Santos (STO) H2 2024 earnings summary

Executive summary

• Delivered strong 2024 financial and operational results, with robust cash generation, disciplined low-cost operations, and significant safety improvements, including a 40% reduction in Lost Time Injury Rate.

• Revenue declined 9% to $5.4 billion and net profit after tax fell 14% to $1.2 billion, impacted by lower realised prices and production volumes.

• Major projects Barossa (LNG) and Pikka (Alaska) remain on track, with Barossa 91% complete and Pikka phase 1 over 76% complete, supporting future production growth.

• Moomba CCS phase 1 became fully operational, storing 340,000 tonnes CO2e in 2024 and supporting a 26% reduction in Scope 1 and 2 emissions since 2019-20.

• Strategic focus on operational efficiency, technology adoption, disciplined capital allocation, and decarbonisation.

Financial highlights

• Sales revenue reached $5.4 billion, EBITDAX $3.7 billion, and net profit after tax $1.2 billion, all down year-over-year.

• Free cash flow from operations totaled $1.9 billion, with $757 million returned to shareholders via dividends and buybacks.

• Final dividend of $0.103 per share declared, total annual dividend $0.233 per share.

• Net debt at $4.9 billion, gearing at 23.9%, and liquidity of $4.4 billion.

• Unit production cost delivered at $7.85/boe, with guidance to fall below $7/boe once Barossa and Pikka are online.

Outlook and guidance

• Production expected to increase by over 30% by 2027 as Barossa and Pikka come online, lowering unit costs and supporting robust free cash flow.

• 2025 production guidance: 90–97 mmboe, with unit production costs targeted at $7.00–$7.50/boe.

• Capital expenditure for 2025 expected at $1.2–$1.3 billion for sustaining and major projects.

• Targeting $100–$150 million in annual structural savings over 1–2 years through cost reviews and technology.

• New capital allocation framework from 2026: at least 60% of all-in free cash flow to be returned to shareholders once major projects are online.