Seplat swings back to profit in H1 as gain hits N14.12billion

The decision of Seplat Energy, Nigeria’s largest listed Oil & Gas firm by market value, has bounced to profit of N14.12 billion, thanks to a fresh debt refinancing through the issuance of $650 million senior notes.

A sharp rise in global oil and gas prices positively affecting the books of some of the biggest oil producing companies in the world as Nigeria’s Seplat Energy declared a rebound from loss to profit in its half-year financials, highlighting a rise by half in revenue to N120.4 billion, a 35.9percent increase compared to 2020

Although the boost to revenue was considerable and timely, Seplat Energy realised N4 of every N5 sales it made from crude oil, with the rest contributed by gas, which underscores a steep imbalance between the two income sources.

As a result of the above development, Profit for the period stood at N14.118 billion in contrast to the N37.782 billion loss incurred in the corresponding period of last year.

“The strength of our balance sheet was demonstrated in March when we were able to refinance at considerably lower cost through the issue of $650 million senior notes,” Seplat Energy’s Chief Executive Officer Roger Brown, said in a statement on its first half results.

Read Also: Seplat declares interim dividend of 2.5 cents, half year PBT up 142.7%

He added, “we have since committed to quarterly dividend payments providing more frequent returns to shareholders. For the second quarter, we have declared a dividend of US2.5 cents per share”.

Seplat Energy’s gas sales revenue increased by 19.7percent to $63.9 million due to higher gas sales volumes of 21.7 Bscf, which is reflective of the new gas wells brought onstream during the period and the full operations of the Oben gas plant which underwent a turn-around maintenance in Q1 2020.

Gas sales contributed 20.7percent of total Group revenue in the period compared to 22.9 percent last year.

The Company’s tax expense for the first half of 2021 was $25.9 million, compared to a tax credit of $35.1 million for the same period in 2020. The tax expense is made up of a deferred tax expense of $11.3 million and a current tax charge of $14.6 million.

“Having established ourselves as one of Nigeria’s most successful indigenous independent oil and gas companies, we will now build on that strong base and accelerate our domestic gas business, expanding along the gas value chain into LPG and CNG,”
Brown said.

Seplat Petroleum rebranded as Seplat Energy in May with an eye on Nigeria’s energy transition.Seplat will “selectively target opportunities in gas to power and solar energy, critical to providing an alternative to expensive diesel generated electricity”, Brown said in a presentation. He noted that Nigeria had the “highest cost of energy in the world”, owing to its reliance on generators.

Seplat will enter power markets selectively, the presentation said. It will look to combine gas with solar and explore the carbon offset markets.

Brown’s presentation also noted the changing nature of Environmental, Social, and Governance (ESG) requirements. Seplat will publish its scope 1 and 2 emissions in the 2021 annual report, it said.

Seplat Energy also announced the appointment of Emma FitzGerald as a non-executive director, who has previously worked at Shell and Puma Energy.

FitzGerald stepped down from her role as CEO of Puma in April. She is replacing Lord Mark Malloch-Brown on Seplat’s board as of August 1.

“The board of Seplat Energy is indeed delighted to have Dr. Emma Fitzgerald on board as she brings vast knowledge in important areas such as the energy sector, renewables and sustainability,” said company chairman ABC Orjiako.

“Seplat Energy has a great future ahead and looks forward to the enormous contribution she will make
towards its continuing global success.”