Woodside Energy (WDS) is a current holding within the ASX Blue Chip portfolio, and has this morning delivered its full-year results for 2023.
Despite a significant downturn in net income and underlying profit, the company has outperformed analyst expectations, with its shares witnessing a 1.5% uptick against a broader market decline of 0.28%.
The Perth-based energy giant announced an underlying profit of $3.32 billion, a 37% decline from the previous year but still ahead of the consensus estimate of $3.07 billion. This decline was largely attributed to a steep fall in net income, which plummeted by 74% year-on-year to $1.66 billion, missing the $2.94 billion forecast.
A significant factor in this year’s financial performance was the impact of lower commodity prices across the board, which was only partially mitigated by an increase in sales volumes. The company also recorded non-cash post-tax asset impairments totalling $1.53 billion, primarily related to its assets in the Gulf of Mexico and the Wheatstone LNG facility in Australia.
Despite the downturn, Woodside declared a final dividend of 60 cents per share, a noticeable decrease from the previous year’s $1.44 but a move that reflects the company’s cautious yet shareholder-friendly capital management strategy. Operating revenue and EBITDA also saw declines of 17% each, echoing the broader challenges faced by the energy sector.
Looking ahead, Woodside maintains its production forecast for 2024, ranging between 185 to 195 million barrels of oil equivalent (mmboe), with capital expenditure expected to remain between $5 billion and $5.5 billion. The company highlighted its commitment to growth and sustainability, with significant milestones including the initial drydock of the hull for the Scarborough floating production unit and the installation of the first modules for Pluto Train 2 in Western Australia.
In a year marked by lower energy prices and considerable asset writedowns, Woodside’s ability to exceed analyst expectations speaks to its operational strength. As a reminder, Woodside’s inclusion in the ASX Blue Chip portfolio is based on dividend yield, which currently sits at 14.8%. The portfolio is next due to be rebalanced on March 1st 2024.
