Central Petroleum Limited - FY2024 Financial Results and Strategic Update
CENTRAL PETROLEUM LIMITED (CTP) Share Update September 2024 Tuesday 17th
Central Petroleum Reports $12.4 Million Net Profit for FY2024
Central Petroleum Limited (ASX: CTP) has reported a remarkable turnaround in its financial performance for the fiscal year ended 30 June 2024, achieving a statutory net profit after tax of $12.4 million.
Instant Summary:
- Achieved a net profit of $12.4 million for FY2024, compared to a loss of $8.0 million in FY2023.
- Sold 50% interest in the Range CSG Project for $12.5 million, realizing a $13.8 million book profit.
- Secured new gas sales agreements expected to provide more reliable cash flows.
- Positive net cash position of $0.8 million, the first in a decade.
- Fully delivered pre-sold gas volumes by December 2023, boosting cash flows from January 2024.
Financial Performance
Central Petroleum Limited has reported a statutory net profit after tax of $12.4 million for the financial year ended 30 June 2024. This marks a significant improvement from the $8.0 million loss recorded in FY2023. The turnaround was largely driven by a $13.8 million profit from the sale of its 50% interest in the Range CSG Project.
Despite a 13% decline in Underlying Earnings Before Interest, Tax, Depreciation, Amortisation and Exploration (EBITDAX) to $13.8 million, the company managed to secure new gas sales agreements that are expected to provide higher and more reliable cash flows in the coming years. These agreements will benefit from higher average gas prices and more consistent sales, mitigating the impact of any future interruptions to the Northern Gas Pipeline.
Operational Highlights
Central Petroleum's operational performance saw mixed results. Net sales volumes for natural gas decreased by 6% to 4,377 TJ, while oil and condensate volumes fell by 13% to 26,304 barrels. Sales revenue also saw a 5% decline to $37.2 million, and gross profit dropped by 24% to $9.8 million.
However, the company achieved a positive net cash position of $0.8 million as of 30 June 2024, marking its first positive net cash position in a decade. This was bolstered by the full delivery of pre-sold gas volumes by December 2023, freeing up additional gas for sale on usual cash terms and enhancing cash flows from January 2024 onwards.
Key Metrics
The financial metrics for FY2024 showed significant improvements in several areas:
- Underlying EBITDA increased by 268% to $9.8 million.
- Underlying EBIT improved by 147% to $2.0 million.
- Underlying loss after tax reduced by 83% to $1.4 million.
- Net cash inflow from operations was $6.9 million, a substantial turnaround from the $2.1 million outflow in FY2023.
- Capital expenditure decreased by 79% to $2.7 million.
The announcement of a $12.4 million net profit is a significant positive development for Central Petroleum and is likely to boost investor confidence. The sale of the Range CSG Project and the securing of new gas sales agreements are strategic moves that should provide more stable and higher cash flows in the future. The positive net cash position is also a strong indicator of improved financial health.
Investor Reaction:
Analysts are expected to react positively to Central Petroleum's financial turnaround. The strategic sale of the Range CSG Project and the new gas sales agreements are likely to be viewed favorably, as they provide a more stable revenue stream. The positive net cash position after a decade is a noteworthy achievement that should bolster investor confidence.
Conclusion:
Central Petroleum's FY2024 financial results indicate a strong turnaround and a positive outlook for the future. Investors should keep an eye on the company's strategic moves and new gas sales agreements, which are expected to provide more reliable cash flows. The company's improved financial health and positive net cash position make it a compelling investment opportunity.