The Beach Energy Ltd [ASX:BPT] share price slumped today following the release of FY21 results.
BPT shares are currently trading at $1.10 per share, down 8.93%.
Over the course of 12 months, the share price of BPT has seen major price corrections.
BPT is down by 30.25% during the period.
Let’s dive deeper into the key financials and examine the reasons for the market’s sell-off.
Beach Energy FY21 overview
BPT production (MMboe) stood at 25.6 million in FY21, a decrease of 4% from the 26.7 million in FY20.
This means BPT’s sales volume took a hit, with sales revenue down 8% to $1,519 million from $1,650 million in FY20.
The company’s underlying EBITDA was down 14% to $953 million, from $1,106 million in FY20.
A likely major reason for today’s negative price action was the reported Net Profit After Tax (NPAT).
BPT’s NPAT was down 37% to $317 million. This number was standing at $499 million in the FY20 release.
To top this all, the underlying NPAT was down 21% to $363 million.
The primary reason was a 6% decline in products sales volume and a 3% decline in realised oil price.
Furthermore, exploration expenses of $57 million — primarily related to the unsuccessful Ironbark 1 exploration well and relinquishment of the Wherry and Barque permits in New Zealand — also contributed to the NPAT figure.
Source: Beach Energy
However, this number was partly offset by the 1% increase in realised gas/ethane prices, 6% reduced royalties due to lower production, and 26% reduction in third-party purchases due to lower crude liftings timing.
Regarding the company’s balance sheet, BPT recorded net debt of $48 million, net gearing of 1.5%, and liquidity of $402 million.
Lastly, Beach Energy announced a final dividend of 1 cent per share, fully franked.
Managing Director Matt Kay acknowledged the fact that FY21 was a challenging year for Beach on the Western Flank.
However, the company remains in a strong position as it delivers on its gas growth projects, primarily in the Perth and Victorian Otey Basins.
‘Beach had two exploration successes in the Victorian Otway, we delivered two value accretive bolt-on acquisitions to grow existing production hubs, and we reached FID on the Waitsia Gas Project Stage 2, bringing Beach closer to supplying gas into the global LNG market for the
‘In our 60-year history, there has never been a bigger project than our Otway Offshore campaign.
‘This saw the successful drilling of Geographe 4 and Xmas trees placed on top-hole locations at Geographe 4 and 5.
‘We also doubled the production deliverability at our Perth Basin facilities, and we are in the final stages of commissioning at the Kupe compression project, extending the life of this important asset in New Zealand.’
Outlook for the BPT share price
The BPT share price has been under selling pressure this year, and today’s announcement likely contributed to a further sell-off.
But shareholders holding firm may point to some positives.
For instance, the Otway Gas plant operated at 99.3% reliability, with Kupe and Middleton facilities standing at 98.5% reliability.
And Beach Energy successfully drilled Geographe 4 development well, offshore Otway Basin, with results in line with expectations.
Those more bullish on the BPT stock may see in these developments a way for the company to regain momentum in the medium term as the sell-off potentially invites bargain hunters.
BPT’s struggles this year may mean some investors switch their attention to other opportunities.
Especially opportunities that do not have to rely so much on developments in traditional energy sectors.
Given some of BPT’s problems today, some investors may be thinking about the potential benefits of ETFs — as opposed to individual stocks.
If this is what you are into, be sure to check out The Rum Rebellion’s latest report on our top five ETFs — it’s well worth a read.
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