Reporting Snippets: OSH, KGN

The rebound in global oil and LNG prices that helped Santos and Woodside back to solid profits for the half year to June 30, has worked its magic on Oil Search’s results for the same period.

The PNG-focused and would be marriage partner for Santos, on Tuesday reported a $US139 million ($A193 million) half-year profit on the back of strengthening market conditions and “resilient” operational performance, up from a $US266 million loss for the same time a year earlier.

The board resumed dividend payments to shareholders, declaring an interim dividend of 3.3 US cents a share.

“Oil and LNG markets have continued to recover from the initial economic impacts of the COVID-19 pandemic led by a robust demand rebound in Asia,” Oil Search CEO Peter Fredricson said in the statement to the ASX.

“We have seen a significant increase in core earnings, reflecting higher realised oil prices and a sustained focus on reducing underlying costs,” he added.

Oil Search and Santos are conducting due diligence on each other with the objective of combining their oil and gas interests across Australia, Papua New Guinea and Alaska.

The two companies are looking at a proposal whereby Oil Search investors would receive 0.6275 new Santos shares for each Oil Search share held, implying a $4.29 value for each Oil Search share based on July 19 prices. That would value both companies at $22 billion.


The full year results from online retail site, were worse than expected, much worse.

The company told the market on Tuesday net profit after tax had plunged 86.8% to $3.5 million for the year due to a raft of unexpected costs.

As a result, there’s no final dividend.

These extra costs included $25 million in higher storage and marketing costs as the business was forced to heavily discount excess inventory bought with the expectation that the COVID-elevated online sales boom would continue unabated through the second half, which it didn’t as lockdowns eased and Australian consumers flocked back to bricks and mortar retailing.

There was also $7.7 million in costs incurred due to warehousing and supply chain disruptions while another $12 million was also spent acquiring more shares in New Zealand online retailer Mighty Ape.

Due to these unexpected expenses, Kogan declared it would not pay a final dividend to conserve cash and invest further in the business, leaving investors with just the 16-cent interim dividend declared in February.

Stripping out these costs, Kogan’s adjusted net profit rose 43.2% to $42.9 million.

Gross sales at the business cracked $1 billion for the first time, up 46.2% to $1.18 billion for the year.

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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