Why the Santos (ASX:STO) share price is on the radar today

The Santos (ASX:STO) share price is in focus today after the company released its annual results this morning. Here’s the lowdown.
The post Why the Santos (ASX:STO) share price is on the radar today appeared first on The Motley Fool Australia. –

oil share price represented by cash notes spilling out of oil pipe

Santos Ltd (ASX: STO) shares will be in focus today after Australia’s second-largest oil and gas producer released its annual results this morning. By the market’s close on Wednesday, the Santos share price was fetching $7.04 after dropping by around 4% over the past month. 

Let’s take a look at what Santos reported.

Record annual production

The Santos share price will be on watch this morning after the company reported record annual production of 89 million barrels of oil equivalent (mmboe), up 18% on the year prior.

Despite this, the company still reported an annual net loss after taxes of US$357 million.

Santos advised that the net loss includes previously announced impairments primarily due to lower oil price assumptions. It further noted that both oil and LNG prices were significantly lower than the previous year due to coronavirus.

Sales revenue for the annual period dropped 16% from approximately US$4 billion in 2019 to around US$3.4 billion in 2020.

Santos generated US$740 million in free cash flow for the full year. This is 3.5 times greater than what was delivered in 2016 when oil prices were in a similar range.

Investors will be eyeing the Santos share price in morning trade after the company’s board resolved to pay a final dividend of US5 cents per share, fully franked. This is in line with the previous year’s final dividend and brings full-year dividends to US7.1 cents per share.

CEO commentary 

Reflecting on the annual results, Santos Managing Director and Chief Executive Officer Kevin Gallagher said:

2020 saw us ride through the bottom of the cycle while still generating free cash flow under a sustainable and disciplined operating model. As prices and demand recover, our projects are much better placed than those of our competitor countries. Living by our disciplined approach to cost and capital allocation, and remaining cash flow positive through 2020 means we are well positioned for further efficiency gains and growth initiatives in 2021.

He concluded that:

Our strongly cash-generative base business and diversified portfolio means that we are well positioned to drive free cash flow as commodity prices recover.

Santos share price snapshot

Over the past year, the Santos share price has fallen by around 13%. Santos shares fell as low as $2.73 during March 2020 before recovering to their current levels.

Based on the current Santos share price, the company has a market capitalisation of around $14.6 billion with 2.1 billion shares outstanding.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor Gretchen Kennedy has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the Santos (ASX:STO) share price is on the radar today appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!