Woodside Energy Group has released its financial results for the half-year ended June 30, 2024, showcasing robust performance and strategic growth initiatives.
The Australian energy giant reported a net profit after tax of $1,937 million and an underlying net profit after tax of $1,632 million.
The company’s operational highlights include a production of 89.3 million barrels of oil equivalent (MMboe) in the first half of 2024, maintaining its full-year production guidance.
Woodside also achieved a significant milestone with the commencement of oil production at the Sangomar Project in June, which subsequently reached its nameplate capacity of 100,000 barrels per day.
Woodside‘s financial strength is evident in its operating cash flow of $2,393 million and positive free cash flow of $740 million.
The company’s board has determined a fully franked interim dividend of 69 US cents per share, representing a half-year annualised dividend yield of 7.3 per cent.
Saranga Ranasinghe, Vice President and Senior Analyst at Moody’s Ratings, provided insights on Woodside’s financial performance, stating: “Woodside’s results for the six months ended June 2024 are in line with our expectations.
“The company’s EBITDA and operating cash flow reduced due to lower average realised prices than the previous corresponding period.
“Still, the company’s credit metrics have ample headroom against our rating tolerance thresholds.”
Ranasinghe noted that while reported gearing increased to 13.3 per cent as of June 2024, it remains at the lower end of the company’s target range of 10 per cent to 20 per cent.
This increase reflects high capital spending and tax payments.
Woodside announced two major acquisitions during the period, which, combined with ongoing growth initiatives, will keep the company’s capital spending and execution risk elevated.
Ranasinghe commented on these developments, stating: “Both projects are not income producing at acquisition. While Woodside has sufficient cash on hand and committed credit facilities to more than cover the cash outflow for the two transactions, the company’s debt levels are likely to increase substantially until the projects become cash flow accretive.”
Despite these challenges, Moody’s maintains a positive outlook on Woodside’s financial stability. Ranasinghe stated: “Given the strength of Woodside’s credit metrics and balance sheet, we do not expect its potentially elevated capital requirements and debt levels to fund the two acquisitions to materially weaken the company’s credit quality.”
Woodside continues to progress with its Scarborough Energy Project, which was 67 per cent complete at the end of H1 2024, with the first LNG cargo expected in 2026.
The company also completed the sale of a 10 per cent non-operated participating interest in the Scarborough Joint Venture to LNG Japan for $910 million.
As Woodside navigates through its growth phase and strategic acquisitions, the company’s conservative financial profile and track record of protecting its credit profile in challenging environments position it well for future success.
