Santos posts $935m loss, freezes executive pay
Santos has frozen its senior executives’ salaries after falling to a $935 million full year net loss.
The loss compares to a net profit of $516 million a year ago and was weighed down by $1.6 billion in asset writedowns.
In its full year results today, Santos revealed it had frozen recruitment and “removed 520 positions to date”.
Santos announced last week that it was writing down the value of its oil and gas assets in light of the sharp slide in global oil prices, which have halved in six months to below $US60 a barrel.
The company, Australia’s second largest oil and gas producer, said that in light of a fall in the share price from a high of $15.19 last year to currently $8.24, it had fixed its executive pay at 2014 levels.
Its shares had slumped by 28 cents, or 3.4 per cent, to $7.96 by 1030 AEDT.
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However, it will still pay out short term bonuses but has reduced them from 78 per cent to 58 per cent of total incentives, long term incentives are not being vested and pay rises for board members have been deferred.
Chief executive David Knox received $2.42 million in fixed pay in 2014 plus a $983,200 bonus.
The company maintained its final dividend of 15 cents per share, fully franked.
Despite a loss, Santos made significant progress in 2014 delivering its highest production in five years, record sales revenue, strong operating cash flow, start-up of the PNG LNG project and commissioning of the Gladstone LNG project in Queensland, Knox said.
“The underlying performance of our business remains strong and we look forward to further production growth in 2015 with the start-up of GLNG in the second half of this year, within the $US18.5 billion budget,” he said.
“The bottom line result nevertheless reflects the impact of the unexpectedly sharp down-turn in oil prices towards the end of the second half in particular.”
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Capital expenditure in 2015 was forecast at $2 billion, 44 per cent lower than 2014, and cuts to production costs of 10 per cent were being targetted.
Net debt increased by $2.6 billion to $7.5 billion.
The company is forecasting an increase in production from 54.1 million barrels of oil equivalent to 57-64mmboe.
Early this month, Santos flagged significant job losses as part of a review of expenditure.
SANTOS SLUMPS TO LOSS
* Full year net loss of $935m, down from a $516m net profit
* Underlying net profit of $533m, up six pct
* Revenue up 12 pct to $4.1b
* Fully franked final dividend of 15 cents per share
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