Avuru bows out after delivering over 25-fold profit for Seplat

Austin Avuru, Chief Executive Officer (CEO) of Seplat Petroleum Development Company Plc, is set to exit the leadership position after a decade which saw the tycoon deliver more than twenty-five times of profit for the Nigerian independent Oil & Gas Company.

BusinessDay ran a quick check on Seplat’s financial performance following the company’s announcement of Avuru’s retirement effective July 31, 2020, and discovered the company did not only deliver impressive profit but also created more value for its shareholders.

For instance, in the 2010 financial year when Avuru came on board as Seplat CEO, the company recorded a net-profit of N1.93 billion. This grew steadily for a period of three years to N85.42 billion in 2013 but halved to N43.5 billion in 2014, no thanks to a slump in the international crude oil prices below $100 per barrel.

While the woes which bedevilled the crude oil value lingered, Seplat’s earnings as well as its net income remained unimpressive, a situation which led the oil and gas company to record a loss of N24.84 billion in the 2016 financial year – the same year Nigeria’s economy entered into a recession.

However, the company under Avuru’s leadership came out stronger a year after as Seplat’s bottom line rebounded to a record N96.42 billion in 2017 and later settled at N49.68 billion in 2018.

The implication of this is that Avuru, who is Seplat’s pioneering managing director, has grown the company’s profit by 2,473 percent to N49.68 billion since he took over the company as the CEO. Also, Seplat’s 2018 profit also represents 25.73 times its net profit in 2010.

Revenue rose from N12.45 billion in 2010 to N228.39 billion in 2018, while gross profit increased from N5.6 billion to N119.75 billion over the same period.

While the company grew in profitability, its stock became more valuable. Seplat’s earnings per share (EPS) rose from N5.5 to N79 as at the end of 2018 financial year. EPS measures the amount of money each share of stock would receive if all of a company’s profits were distributed to the outstanding shares.

Total assets surged by 885 percent to N775.66 billion in 2018 from N 78.73 billion in 2010, shareholders’ fund soared to N526.3 billion against a net value of N7.93 billion recorded by the company in 2010.

But besides all these, the Seplat’s helmsman also took some strategic decisions since 2010 which led to the overall growth of the company.

Notable among these decisions are the development of a strong organization, the deployment of agile systems, processes and stakeholder relationships that allowed the organization to grow rapidly from a gross production of 22,700boepd as at December 2010 to peaks of 111,368boepd gross production as at December 2018 through major drilling campaigns and major new Oil and Gas plants development.

In addition to this, his leadership skills, personal dedication and hard works saw the company acquiring 40 percent of OML 53 and having a successful IPO in 2014.

These created an opportunity in partnership with NNPC, to spawn a mid-stream subsidiary, ANOH Gas Processing Company Ltd currently progressing what will ultimately be a 300MMscf/d of Gas, 22,500bdp of condensate and 1,200boepd of LPG processing company, according to Seplat.

“Looking forward, Seplat plans to position itself for a next phase growth ambition which would see the expansion of its footprint in terms of energy business activities, a plan to pursue offshore assets as well as opportunity driven entry into different geographies,” Seplat said.

As part of the company’s corporate transition plan, its review of current organizational and systems structure led its Board to select Roger Brown as the successor to Avuru, when Avuru steps down on 31 July 2020.

Brown joined Seplat in 2013 as the CFO, and has played significant roles in various asset acquisitions by the company.


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