The Santos Ltd (ASX: STO) dividend is one for investors to keep a close eye on. Santos this morning more than doubled its interim distribution to US 5.5 cents per share.
However, shares in the Aussie oil and gas giant have still slid 1.7% lower at the time of writing following its half-year result.
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What you need to know about the Santos dividend
Let's start with a brief look at the Santos results as a whole. The Aussie energy producer reported its half-year results this morning including the below highlights:
- Net profit after tax of US$354 million (~A$484 million), up from US$289 million (~A$396 million) loss in prior corresponding period (pcp).
- Revenue increased 22% compared to last year's first half to US$2 billion (~A$2.7 billion)
- Earnings before interest, taxes, depreciation, amortisation, and exploration (EBITDAX) of US$1.2 billion (A$1.6 billion) – up 24% on the pcp.
- Free cash flow of US $572 million, up 33% on 1H 2020 figures.
- Santos dividend (interim) up 162% to US 5.5 cents per share.
That last item is the one that would have caught the eye of many a shareholder. Santos has more than doubled its interim dividend to US 5.5 cents (~7.5 cents in AUD) according to today's release.
The Santos dividend increase has come during a period of fluctuating commodity prices and changing supply and demand dynamics.
Santos delivered strong free cash flow throughout the year thanks to record production across its diversified portfolio and cost reduction efforts. A reopening in the first half of the year boosted oil and gas prices and helped increase revenue for the group.
Those strong earnings figures have allowed the Board to increase the Santos dividend but the company's share price is still sliding on Tuesday afternoon.
One looming factor for the Santos share price is the proposed merger with Oil Search Ltd (ASX: OSH).
