Santos Ltd, one of Australia’s largest independent gas producers, reported a weaker-than-expected annual underlying profit and announced a reduction in headcount of roughly 10 percent as its major expansion projects move toward completion.
The company said commissioning activity at its Barossa LNG project encountered delays during fiscal 2025 after two connection failures on utilities and firewater mains pipework systems located on the BW Opal floating production, storage and offloading vessel. Those failures slowed commissioning work and delayed the project ramp-up by about two months, the company reported.
As a result, Santos recorded an underlying profit of $898 million for the 2025 fiscal year, a 25 percent decline from $1.20 billion a year earlier. That result fell short of the Visible Alpha consensus estimate of $904 million.
In addition to the profit shortfall, the company confirmed a final dividend of 10.3 cents per share, matching the previous year’s final payout. Management indicated the headcount reduction - approximately one in ten roles - is being implemented as its major growth projects near the point of completion and transition away from higher staffing levels used during construction and commissioning phases.
The combination of the commissioning setbacks at Barossa LNG and the connection failures on the BW Opal FPSO vessel were identified by the company as primary factors that slowed ramp-up and contributed to the revenue and earnings pressure seen in the fiscal year.
Investors and market observers will note the missed consensus estimate and the decision to hold the final dividend steady despite the fall in underlying profit. The announced workforce reduction signals a shift toward a smaller operational footprint as project activity winds down, a change that may affect near-term operating costs and workforce composition.
Context and implications
This update from Santos centers on operational disruptions during commissioning and a subsequent financial outcome that was below market expectations. The company preserved its final dividend level while moving to reduce staff as long-duration projects complete their development phase.