Media release

Santos dividend no fix for share price woes

The Australasian Centre for Corporate Responsibility​ (ACCR)  is commenting on the release today of Santos Ltd’s annual results for 2023.

Santos has announced a slump in underlying net profit of 42% and an increase in the final dividend of 16%.

The results come as Santos Chair, Keith Spence, faces shareholder dissent at the company’s upcoming annual general meeting. Last week, ACCR filed a members’ statement opposing Spence’s re-election because under his direction the Santos board has failed to deliver a company strategy that maximises shareholder value.

Commenting on the results, Brynn O’Brien, Executive Director at the Australasian Centre for Corporate Responsibility (ACCR) said:

“Today’s results have only reinforced our concerns with the performance of the Santos board and its Chair Keith Spence.

“While Santos boasted it has delivered “record” cash returns to shareholders, this is coming from a very low base over the previous five years.

“The cash returns of US$852 million also coincided with an increase in net debt of US$814 million, which indicates the dividend increase has been assisted by increasing gearing levels. This is not a sustainable strategy for delivery of shareholder cash returns.

“Unlike the majority of peers, Santos did not buyback shares in 2023, which explains why the company’s dividend and share buyback yield of 7.4% still remains well below the 11% average.

“Santos likely hoped this dividend would distract shareholders from the fact there is no reported progress on its review of strategic options since the collapse of merger talks with Woodside. In fact, the company restated its commitment to its strategy in today’s results. This digging in is perplexing and further points to the critical need for a change in leadership.

“This morning’s fall in share price demonstrates investors are not buying the rhetoric.

“The higher dividend this year cannot hide years of underperformance in the share price. According to ACCR analysis, Santos’ pivot to a growth strategy in early 2021 has increased capex by over 200%, but only delivered 7% total shareholder returns (TSR). The average TSR for global and Australian oil and gas peers over the same period was 82%.

“In 2023 the company spent $3 of capex for every $1 of cash returns to shareholders. This is a direct result of Santos’ pivot to growth from early 2021.

“The board must be held accountable for this misguided pivot to growth that has eroded shareholder value.

“As Chair, Keith Spence holds ultimately responsibility for the company's poor performance and strategic failings.”


Chart: Dividend and share buyback yields of Santos and global and Australian O&G peers, using share prices as of 21 February 2024.

Notes: The dividend and share buyback yield is the sum of 2023 dividend yield (Bloomberg 12 month dividend yield as of 21 February 2024 for peers and Santos’ 2023 declared dividend of US$0.262 divided by the Santos’ share price of US$4.8) and share count yield from 31 December 2022 to 31 December 2023

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