Woodside has slashed its final dividend after that $A1 billion-plus writedown in the value of its 50% stake in a Western Canadian LNG project (revealed on Wednesday) took a big bite out of 2019 earnings.
Woodside Petroleum told the ASX yesterday its profit plunged 75% after the write-down in the value of the stake in the Kitimat project in British Columbia that is being managed by Chevron.
The write-down saw Woodside’s net profit to sink to $US343 million ($509.1 million) for the year to December 31, from $US1.36 billion in 2018.
On an underlying basis, the result wasn’t as weak, but it was subpar.
Woodside said its underlying profit, excluding one-off items, fell 24% for the year to $US1.06 billion.
The result was pulled down by weaker oil and gas prices, with revenue falling from $US5.2 billion to $US4.8 billion, as revealed in the 2019 production and sales report released in January.
That weakness in prices has continued into early 2020 with the impact of the coronavirus crisis in china an added unknown for the rest of the year and its impact on oil and gas demand.
The company cut its final dividend to 55 US cents a share, down from 91 US cents a year earlier. That was after a cut in the interim payout to 36 US cents a share from 53 US cents. Full-year dividend slumped by more than a third to 91 US cents a share from $US1.54
CEO Peter Coleman described 2019 as a “pivotal year” for Woodside, in which it delivered a solid performance while laying the foundations for the future.
“This was a good outcome given the challenges of Tropical Cyclone Veronica in the first quarter and major turnaround activity,” he said.
“In a complex and at times challenging environment, we have worked hard to bring all stakeholders with us as we advance proposals to produce 40 trillion cubic feet of gas resources, including from Scarborough and Browse, and deliver value to our shareholders and communities,” Mr. Coleman said in yesterday’s annual report and results.
The shares eased 0.3% to $33.74.