Seplat Energy Records Marginal Net Profit Slide, On 75.53% Tax Expense Rise
Seplat Energy Plc, on Tuesday announces its audited results for the full year ended December 31, 2022, indicating that although revenue grew by N110.282bn, or 37.56% and Profit Before Tax by 15.3% to N86.7bn from N71bn, net profit fell marginally, following a 75.53% jump in tax expenses for the period.
The company, however, generated cash amounting to N242.4bn from N150.9bn year-on-year, representing a 51.6% rise from its operations, in a period that it experienced significant disruption in its production as seen in the second half of the year.
The board recommended special dividend of US5.0 cents per share in addition to final dividend of US2.5 cents per share, bringing total full-year dividend to US15 cents, representing a dividend yield of around 11% at the current LSE share price.
Specifically, revenue rose to N403.9bn from N293.6bn year-on-year; cost of sales rose from N179.414bn to N206.696bn, resulting in a gross profit of N179.217bn within the period, from N114.216bn.
Other loss for the period amounted to N15.302bn, compared to the previous income of N8.056bn; while impairment loss slowed down considerably from N9.036bn to N2.73bn. There was no impairment loss on non-financial assets, compared to the previous year when it stood at N6.216bn; just as reversal on non-financial assets was nil in 2022, by N29.9bn in the previous year.
Operating profit rose to N116.589bn from N100.401bn; finance income improved from N126m to N491m; finance cost fell slightly to N28.425bn from N30.39bn; share of loss from joint venture accounted for using equity method rose to N1.434bn from N1.017bn; resulting in profit before tax of N86.73bn, compared to previous year’s N71.028bn; while profit after tax stood at N44.433bn from N46.931bn, which translated to Earnings Per Share of N45, compared to the previous N97.63 each..
The company’s working interest production averaged 44 kboepd, impacted by outages of key infrastructure predominantly in Q3, while the use of its Amukpe-Escravos Pipeline (AEP) enabled high uptime in December, exit rate of 53 kboepd. It equally completed 13 wells including two wells for the ANOH gas processing plant. ANOH Gas Processing Plant is 95% mechanically complete, awaiting third-party infrastructure completion.
A statement by the company noted that it is continuing its pursuit of regulatory approvals necessary for acquisition of the entire share capital of Mobil Producing Nigeria Unlimited before the end of the Muhammadu Buhari administration on May 29, even as it has finalised a new energy investment plan, and identified near term opportunities for consideration and FID late 2023.
The company also made provisional applications for voluntary conversion of its operated Oil Mining Leases under Petroleum Industry Act; just as it is working on spinning out its midstream gas business in line with PIA provisions, among others.
Commenting on the performance, the statement quoted Roger Brown, Seplat Energy’s Chief Executive Officer, as expressing delight “that our strong financial performance will enable the payment of a US7.5 cent final dividend, despite the significantly disrupted production we experienced in the second half of the year. The full-year dividend of US15 cents represents a dividend yield of around 11% at the current LSE share price.
“As we enter 2023, the business is in a very healthy state, with new wells coming onstream, encouraging appraisal drilling underway at Sibiri, and alternative export routes ensuring good export performance in January and February this year. Our gas business continues to develop, with first gas expected from ANOH in Q4 this year, and we are now in the process of separating our Midstream Gas business from the upstream unit to unlock new value for shareholders.”