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Santos records $1.4bn first-half loss

Business

Santos has slumped to a $1.4 billion first-half loss but CEO Kevin Gallagher says he is confident the Adelaide energy giant is taking the right steps to become a “strong and sustainable” business.

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The loss comes on the back of lower oil prices and a large $2 billion impairment charge announced earlier this week against its Gladstone liquefied natural gas project in Queensland.

Excluding impairments and other one-off items, the company’s underlying first-half loss was $6.5 million after tax.

It will not pay a dividend for the first half.

However, managing director and chief executive officer Gallagher, who joined the company in February, said the establishment of a new operating model for Santos would “lift productivity and drive long-term value for shareholders in a low oil price environment”.

Gallagher said in a statement that the appointment of the new executive team was a key part of the new operating model.

“Our progress is also evidenced by record production and significant cost reductions achieved in the first half … But there is still a lot of work ahead of us.

“Our near-term focus is clear: embed the new operating model, drive down costs and apply available cash flow to reduce debt.

“I am confident we are taking the right steps to ensure Santos becomes a strong and sustainable business.”

In other results reported today, Woodside Petroleum’s first-half profit has slumped 50 per cent slump on the back of lower oil prices, while property and construction company Lendlease Group has lifted full-year net profit 12.9 per cent to $698 million.

Medibank Private has lifted full-year profit by 46.4 per cent to $417.6 million, helped by expanding margins in its main health insurance business. Health insurance premium revenue rose 4 per cent to $6.17 billion, despite a slowing growth across the industry amid affordability challenges. However, operating profit rose due to focus on limiting health claims and lower growth in hospital utilisation rates.

-with AAP

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