Santos posts record underlying profit in 2021
Australian energy company Santos on February 16 reported a record underlying profit in 2021 on the back of surging oil and gas prices. The underlying profit, which excludes one-off items, came in at $946mn for the 12 months to December 31, compared with $287mn a year earlier.
“The results reflect significantly higher oil and LNG prices compared to the corresponding period due to the recovery in global energy demand combined with supply constraints across the industry due to lower capital investment through the pandemic, and three weeks contribution from the Oil Search assets,” Santos said.
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Santos made a net profit after tax of $658mn last year compared with a loss of $357mn in 2020. The reported net profit after tax includes losses on commodity hedging and costs associated with acquisitions and one-off tax adjustments. It is significantly higher than the corresponding period mainly due to impairments included in the previous year, Santos said.
Santos CEO Kevin Gallagher said the highlight of the year was the completion of the merger with Oil Search. The merger was announced in August and was completed in December.
“The financial results we are announcing today include only three weeks of the merged company. Had the merger been in place for all of 2021, the combined asset portfolio would have generated more than $2.3bn in free cash flow for the year,” he said.
Santos expects 2022 production to be 100 to 110mn barrels of oil equivalent (boe) primarily due to higher production from PNG following the Oil Search merger. The company’s output was 92mn boe in 2021. Sales volumes in 2022 are expected to be in the range of 110 to 120mn boe.