Woodside Energy Group Ltd has announced remarkable financial results for the 2024 fiscal year, reporting a net profit after tax of $3.57 billion, marking an incredible 115% rise compared to the previous year's $1.66 billion. This surge is attributed primarily to significant production increases, especially at the company's Sangomar oil field, which is set to play a central role in Woodside's growth strategy moving forward.
Despite this impressive earnings report, Woodside’s operating revenue saw a dip of 6%, decreasing to $13.2 billion, largely due to lower realised commodity prices. The average price per barrel fell by 7% to $63.6, which contributed to the decline even as total sales volume rose by 1% year-on-year to 203.5 million barrels of oil equivalent (MMboe).
CEO Meg O'Neill expressed optimism about the company's performance, highlighting how strong execution at key projects has positioned Woodside favorably for the future. "Our proven track record of operational excellence, disciplined investment decisions and world-class project execution is delivering near-term rewards for our shareholders," O'Neill noted during the earnings presentation. This sentiment was echoed when she described the Sangomar project’s rapid ramp-up to nameplate capacity, achieving 94% reliability.
Woodside's board declared a final dividend of US53 cents per share, contributing to the full-year dividend of US$1.22, which reflects the company's commitment to returning value to its shareholders. Despite the dividend being 13% lower than the previous year, it maintains the payout ratio at the upper limit of its target range at 80%, translating to approximately $2.32 billion distributed to shareholders.
This financial boon stands in stark relief to the severe drop experienced by competitor Viva Energy, whose shares plummeted by 26.88% following disappointing profit results. Viva Energy recorded underlying profit declines and cited challenges largely stemming from higher inflation and changing consumer demands. Chief Executive Scott Wyatt explained how these factors led to lower performance within their convenience business.
Woodside's market position seems to be buoyed not just by its strong earnings, but also by strategic geographic expansions, particularly through its investments in U.S. projects like the Louisiana LNG facility. This expansion is part of Woodside's move toward cleaner energy solutions amid increasing shareholder pressure to address climate change strategies more aggressively.
Analysts noted the importance of Woodside’s new projects, such as the Beaumont New Ammonia initiative, which is anticipated to contribute positively to revenue streams amid growing demand for lower-carbon solutions. Brett Morgan of Market Forces criticized Woodside for not making more substantial changes to its climate strategy, urging investors to hold the company accountable for its emissions before upcoming re-elections at the board level. He emphasized the necessity for more ambitious climate targets rather than perceived corporate spin.
Despite these external pressures, Woodside's stock has remained relatively stable with gains following the profit announcement, rising to $24.02, reflecting investor confidence. Junvum Kim, Saxo Asia Pacific's senior sales trader, remarked, "The results reflect strong production year, highlighting Woodside's proactive shift toward growth and cleaner energy projects."
Looking to the future, the company offers guidance for continued investment across its key projects. With the Scarborough Energy Project nearing completion and expected to deliver its first LNG cargo by 2026, Woodside remains focused on enhancing its production capabilities. They forecast production for FY25 to be within the range of approximately 186 to 196 million barrels of oil equivalent.
Overall, Woodside Energy seems well-positioned within the market, buoyed by its sharp profit improvements and strategic growth initiatives, even as broader market conditions present challenges. Moving forward, the focus will remain on execution amid fluctuated energy prices, which are pivotal for maintaining investor confidence and ensuring the achievement of set financial and environmental targets.