Finance Finance News Santos lifts dividend, profit down

Santos lifts dividend, profit down

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Santos has lifted its dividend to shareholders, despite suffering a 24 per cent slide in its first half profit as writedowns in Indonesia offset higher production and sales.

The oil and gas producer made a net profit of $206 million for the six months to June 30, down from $271 million a year ago.

But underlying profit, which excludes the impact of one-off writedowns to the company’s coal seam gas assets in Indonesia, was up three per cent to $258 million.

The company announced an interim dividend of 20 cents per share, up from 15 cents per share a year ago.

Chief executive David Knox said the company had performed well in the first half, despite the profit slide, and the outlook was good for the rest of the year.

“The first half of 2014 saw Santos achieve its highest oil production in six years, record sales revenue and strong operating cash flow,” he said.

“We have set the foundation for a stronger second half.”

Santos lifted production two per cent to 25 million barrels of oil equivalent (mmboe) while sales were up five per cent to 28.9 mmboe.

The company expects to lift its full-year production to between 51 and 57 mmboe thanks to the massive PNG LNG Project, which shipped its first cargo in late May.

Santos owns 13.5 per cent of PNG LNG, while US-based oil and gas giant operator Exxon Mobil owns 33 per cent and Oil Search owns 29 per cent.

Chairman Ken Borda said income from the project had enabled Santos to lift its dividend.