Santos and Origin Energy share prices: earnings results unpacked

We examine some of the key figures from Santos and Origin Energy’s full and half-yearly results, released to the market this morning.

Though the ASX rose strongly by the middle of the day, it pulled back as the session wore on.

The energy sector experienced comparable volatility; and though the S&P/ASX 200 Energy index rose 88 points to 11,057 a little before noon, it was up just 24 points by the afternoon.

This comes after Santos (ASX: STO) and Origin Energy (ASX: ORG) released their full and half-yearly results to the market this morning.

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Santos share price: a good set of numbers

Santos reported a solid set of full-year results today, with annual free cash flow coming in at a record US$1.1 billion.

On the top-line, the energy giant reported a 10% boost to product sales, reaching US$4,033 million in FY19. Profits (NPAT) recorded comparable growth for the full-year, hitting US$674 million (+7%).

Likely to the interest of income-focused investors, the company also reported a Final Dividend of US5.0 cents per share – bringing the company’s full year dividends to US11.0 cents in total.

Speaking of these results, the Santos CEO, Kevin Gallagher said:

'The year was highlighted by record onshore drilling performance, lower unit costs, successful integration of the Quadrant acquisition and significant progress on our diversified portfolio of growth projects.'

'Consistent application of our disciplined operating model continues to deliver cost reductions and efficiencies, with normalised production costs down 8% to US$6.97/boe.’

Even when considering this stable set of results, the Santos (ASX: STO) share price proved volatile in early trade, dipping 0.14% a little after noon.

Origin Energy share price rises on results

By comparison to Santos, the Origin Energy share price rose today even though the company announced lower H1 profits. Investors may have appreciated the revelation of an Interim Dividend of 15 cents, up 50% from the company's Interim Dividend from the year prior.

Specifically – as part of Origin’s half-yearly – the company reported a declining statutory H1 profit of $599 million, against stronger free cash flow (FCF) of $680 million.

In response to these results, Origin's CEO, Frank Calabria said:

'In the first half, the robust operational performance of our business continued to generate strong cash flow' and that 'we have continued to deliver significant supply to the domestic market, with plenty of gas available for manufacturers and other larger users and at lower prices.'

Even so, Ord Minnett analysts described today's results as 'mixed', though noted that Origin reported earnings (NPAT) 8% ahead of their consensus – attributed to a lower effective tax rate.

Though mixed, the broker remains bullish on the stock overall: Ord has an Accumulate recommendation on ORG and a 12-month price target of $9.50.


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