SANTOS CLAWS BACK LOSS DESPITE HEAVY IMPAIRMENT CHARGES

SANTOS CLAWS BACK LOSS DESPITE HEAVY IMPAIRMENT CHARGES

SANTOS Limited (ASX: STO) has reported a loss of $640 million for the first six months of 2017, a huge reduction on last year's $1.4 billion recorded loss, with the results including an $872 million impairment charge on account of lower oil price forecasts.

The Adelaide-based company posted improved results from the previous comparable period, on the back of a turnaround in strategy for the oil company, according to Santos cEO Kevin Gallagher.

"We have removed substantial costs, generated significant free cash flow and reduced net debt," says Gallagher.

The company generated earnings of $908 million and revenue of $1.9 billion for the first half of 2017, with revenue being driven by higher LNG sales volumes.

"Our focus on more efficient, lower cost operations has delivered significant improvements in earnings and cash flow," says Gallagher.

"Santos' core asset portfolio of five long-life natural gas assets now provides stable base production for the next decade."

The company recorded an underlying profit of $197 million, a substantial improvement on the underlying loss of $6 million this time last year.

Operating costs were on the rise for the South Australian oil company which increased by $239 million due to higher LNG plant costs, higher pipeline capacity charges, and higher royalty and excise costs due to higher average commodity prices.

The company expects sales volume for the remainder of 2017 to hit between 77 to 82 million barrels of oil.

The Santos board has decided to not pay an interim dividend following the first half results.

Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.

Business News Australia

Enjoyed this article?

Don't miss out on the knowledge and insights to be gained from our daily news and features.

Subscribe today to unlock unlimited access to in-depth business coverage, expert analysis, and exclusive content across all devices.

Support independent journalism and stay informed with stories that matter to you.

Subscribe now and get 50% off your first year!

Four time-saving tips for automating your investment portfolio
Partner Content
In today's fast-paced investment landscape, time is a valuable commodity. Fortunately, w...
Etoro
Advertisement

Related Stories

Riverside backs Wollongong IT powerhouse VITG as M&A opportunities beckon

Riverside backs Wollongong IT powerhouse VITG as M&A opportunities beckon

Virtual IT Group (VITG), a Wollongong-based managed service provide...

Booktopia extends share trading suspension as critical funding announcement looms

Booktopia extends share trading suspension as critical funding announcement looms

Just as so many Booktopia (ASX: BKG) customers had to wait longer t...

Troubled retailer City Chic sells US brand Avenue for $18 million, launches capital raise

Troubled retailer City Chic sells US brand Avenue for $18 million, launches capital raise

As it prepares to launch a $23 million capital raise, str...

Brisbane Airport forecasts arrivals lift over winter school holidays

Brisbane Airport forecasts arrivals lift over winter school holidays

An estimated 2.5 million people are set to pass through Brisbane Ai...