Santos has posted a $935 million loss after the slide in oil prices forced it to writedown the value of its oil and gas assets.
The full year loss loss compares to a net profit of $516 million a year ago. It was weighed down by $1.6 billion in asset writedowns last week in light of the sharp slide in global oil prices.
If you take the writedowns out of the equation, the company still made a profit of $535 million.
Santos chief executive David Knox chose to focus on this fact. Nevertheless he conceded that the sudden drop in the price of oil is having a severe impact.
“The bottom line result … reflects the impact of the unexpectedly sharp down-turn in oil prices towards the end of the second half in particular which saw us recognise significant non-cash asset impairments announced earlier this month.
“We will continue to proactively manage our costs, both capital and operating, in line with the current market environment. Capital expenditure in 2015 is forecast at $2 billion, 44 per cent lower than 2014, and we expect to reduce production costs per barrel by 10 per cent. Costs will be tightly managed as we work through the current oil price environment.”
The company also announced a final dividend of 15 cents per share, fully franked, which is unchanged from a year ago by down from the 20 cent dividend it paid for the first half.