Financial Analysis of Santos Limited: Comparative Analysis with Woodside Petroleum

Accounting for managers
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Executive Summary
This report aims to perform financial analysis of Santos Limited. It is an oil and gas
company from Australia and operates in Asia-Pacific. In order to understand the company
performance better, a comparative analysis has been drawn with its competitor Woodside
Petroleum Ltd which is a fellow Australian company operating in oil and gas industry. In the
report, industry outlook has been taken to determine the impact over the companies due to
COVID-19. Further, performance of the two companies has been evaluated for the five years to
understand the trends in its performance and operations.
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Table of Contents
Executive Summary.........................................................................................................................2
About Santos....................................................................................................................................4
Competition Benchmark..................................................................................................................4
Industry Overview and Outlook.......................................................................................................5
COVID-19 Impact to Santos............................................................................................................6
Share Price Performance..................................................................................................................7
Financial Performance.....................................................................................................................8
Key Trend Analysis....................................................................................................................8
DuPont Framework Analysis......................................................................................................9
Sustainable Growth Rate...........................................................................................................10
Cash Conversion Cycle.............................................................................................................10
Other Key Ratios.......................................................................................................................11
Overall Santos Financial Performance......................................................................................11
Conclusion.....................................................................................................................................12
References......................................................................................................................................13
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About Santos
South Australia Northern Territory Oil Search also known as Santos Limited is an
Australian energy company. It is engaged exploring, extracting and supplying oil and gas to
households and industries across all Australia and various other regions of Asia Pacific. It was
incorporated in the year 1954 and is headquartered at Adelaide, South Australia. It has a
disciplined low-cost operating model which has helped it earn title of being resilient throughout
commodity price cycle. It is touted as one of Australia's biggest domestic gas suppliers and has
aimed to achieve net zero emissions by 2040 (About Santos, 2020).
Competition Benchmark
Santos is engaged in energy business. In Australia, other than Santos, biggest companies
in the oil and petroleum business are Woodside Petroleum Ltd, Chevron Australia Holdings Pty
Ltd, BHP Group Limited, ExxonMobil Australia Pty Ltd and Shell Energy Holdings Australia
Limited. Out of the all, Woodside Petroleum Ltd is taken as competiton benchmark as it was also
incorporated in year 1954 and is a fellow Australia incorporated company. It is headquartered at
Perth, West Australia and has a target of achieving net zero emissions by 2050 (Woodside
Annual Report, 2020). It has larger production than Santos.
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Illustration 1: 2020 Results Santos Ltd, 2020 Source: Annual Report 2020