Santos profit shock, CEO resigns

Friday, 21 August 2015

The LNG crash just turned nuclear. Santos announced first half net profit of $37 million versus $80 million expected. The full year target is $253 million. Fat chance. For some stupid reason it retained its dividend (with a 25% cut) and denied the need for a capital raising.

Amazingly, CEO David Knox resigned and the company will undertake a full strategic review. I guess we’ll save the rights issue for the new CEO and his cleanup.

Remember the Dornbusch rule:

In economics, things take longer to happen than you think they will, and then they happen faster than you thought they could.

About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.