SYDNEY — Beach Energy Ltd. said its annual net profit rose by 58%, as the sharp rise in energy prices that followed Russia’s invasion of Ukraine more than offset the impact of declining production.
Beach reported a net profit of 500.8 million Australian dollars (US$355.8 million) for the 12 months through June, up from A$316.5 million a year ago. On an underlying basis, Beach’s net profit rose by 39% to A$504.3 million.
Directors of the company declared a final dividend of 1 Australian cent a share, in line with the payout a year ago. That brought the total dividend for fiscal 2022 to 2 cents.
Rising energy prices more than offset the impact of lower production on Beach’s revenue in fiscal 2022, as markets responded to security of supply concerns stoked by Russia’s invasion of Ukraine.
Beach last month reported annual sales revenue of A$1.75 billion, up from A$1.52 billion a year earlier, despite production of oil and natural gas falling 15% to 21.8 million barrels of oil equivalent.
Illustrating the boost to revenue, Beach said its crude oil fetched an average price of A$140.10/bbl across the year compared to A$78.10/bbl in fiscal 2021.
As Beach’s balance sheet strengthens, some analysts have begun to speculate that the company could deploy some of its A$165 million net cash on acquisitions. In a note last month, analysts at Macquarie said Beach’s reserve life is starting to look a little low as it grows production and that this could motivate management to do a deal to shore it up.
Beach is targeting production of 28 million barrels of oil equivalent by the 2024 fiscal year. That goal, unveiled around a year ago, represented a reset of expectations after earlier setbacks at its Western Flank asset in Australia’s Cooper Basin.