Beach Energy to cop half a billion-dollar impairment
A lower commodity price outlook means Beach Energy will cop a significant impairment charge in its full year results.
South Australian oil and gas producer Beach Energy will be hit with a non-cash impairment charge of $474 million after tax in its full-year results.
The company blames the charge on a “lower commodity price outlook”, with its Cooper Basin operation the biggest contributor to the impairment ($341 million after tax of the $474 million).
Beach Energy – valued at $2.65 billion and ranked third in the 2024 South Australian Business Index – said the Cooper Basin impairment was driven by lower commodity prices and flood response activities.
Meanwhile, the $133 million after tax impairment of its Perth Basin asset was driven by lower commodity prices and higher capital expenditure for future development activities.
It comes alongside the group’s fourth quarter financial statement which showed full year production was up nine per cent to 19.7 million barrels of oil.
The company said its Otway Gas Plant operated at or near capacity for 25 days to meet higher winter gas demand in the quarter, while 19 per cent of East Coast gas demand during the financial year came from Beach’s operated assets.
Sales revenue in the full year hit $2 billion – up 13 per cent – while earnings also rose by 20 per cent.
Net profit after tax was up about 30 per cent, the company said ahead of releasing its full year results on August 4.
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The company’s operating cash flow was up 46 per cent over the years to $1.1 billion, while it carries $368 million of net debt.
Beach CEO and managing director Brett Woods said the company “ended the financial year with strong results for the fourth quarter, material growth in production and revenue for full year FY25”.
“As we look to FY26, our strong balance sheet, low-cost operations and domestic focus make Beach uniquely positioned to pursue both organic and opportunistic growth to deliver on our vision to become Australia’s leading domestic energy company,” Woods said.
Shares in Beach were down 8.91 per cent to $1.18 per share at the time of writing.
