2232 GMT - Beach Energy's desire to pay a progressively higher dividend stokes doubt at Citi. Analyst James Byrne says a progressive dividend is inconsistent with a tight payout range and the nature of a commodity facing business with lumpy capex. Progressive dividends can work for exploration and production companies for a few years. Then the free cash flow runs out, Citi says, such as when as the energy price cycle turns. Paying out 40% of free cash flow in FY 2025 equates to a A$0.07/share final dividend. Beach's interim dividend was A$0.03/share. "With our FY 2026 free cash flow only supporting A$0.08/share in total (50% payout, US$61/bbl Brent) there isn't any room to be more 'progressive' on dividends if the overall FY 2025 payout is in the 40-50% range," Citi says. (david.winning@wsj.com; @dwinningWSJ)
(END) Dow Jones Newswires
February 06, 2025 17:32 ET (22:32 GMT)
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