• Monday, June 24, 2024
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Seven things to note from Seplat Energy’s 2021 financials

Seplat resolves issues with indigenous contractors

Seplat Energy Plc, a leading Nigerian energy company listed on the Nigerian Exchange and the London Stock Exchange recorded a profit of $177.3 million in 2021, bouncing back from a net loss of N85.3 million in 2020.

The company’s performance was helped by the oil price rally which averaged $70.54/bbl in 2021 compared to $39.95/bbl in 2020 when the pandemic weakened oil sales.

Seplat’s recently made a bid to acquire the entire offshore shallow water business of ExxonMobil in Nigeria at the cost $1.2billion.

Revenue performance

Higher oil prices pushed the energy company’s revenue from crude oil sales up by 38.2 percent to $733 million by the end of 2021 compared to N530.5 million achieved in 2020.

Gas sales revenue increased by 2 percent to $114.8 million from $112.5 million in the previous year due to higher gas sales volumes of 39.4 Bscf compared to 37.1 Bscf in 2020.

Operating Profit

An operating profit of $250.7million was realized after a loss of $31.7million in the previous year mainly due to impairment charges costing $160.9million.

Covid-19 pandemic led to a reduction in activities in administrative cost by 5.4 percent and an offset of $74.7 million impairment reversal, making a total of $160.9million, including a $22.6 million for outstanding receivables and non-financial asset charges of $15.2 million for the rigs.

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Taxation

Seplat’s income tax expense jumped to $60.2 million in 2021, compared to $5.1 million in 2020. The tax charge consisted of a deferred tax charge and current tax charge of $22.6million and $37.6% respectively, the former was driven by the unwinding of previously unutilised capital allowance.

Dividend

The company announced that it distributed four dividend payments in 2021 amounting to $73.4million. By the end of the financial year 2021, the Board recommended a final dividend of US2.5 cents per share, bringing a total dividend share to be $0.10 per share. The dividend is to be paid after the Annual General Meeting on the 18th of May 2022, which is beheld in Lagos, Nigeria.

Cash flows from financing activities

The company’s net cash outflow from financing activities was $100.8 million in 2021 compared to $217.4 million in the previous year.

The proceeds from loans and borrowings stood at $671.0 million in 2020 reflecting the debt restructuring where the Group offered senior notes of $650 million.

Cash flows from operating activities

Net cash flows from operating activities, after accounting for tax payment, stood at $12.4 million, higher than $10.4 million recorded in 2020.

The company’s free cash flow for the period amounted to $200 million from $163.9 million in the periods under review.

Outlook for 2022

The company stated in its financial statement that its full-year production guidance for 2022 is set at 50,000 to 60,000 boepd on a working interest basis, comprising 30,000 to 35,000 bopd liquids and 116 to 150 MMscfd (20,000 to 25,000 boepd) gas production.

Seplat’s capital expenditure for 2022 is expected to be around $160 million.

“We expect to drill a minimum of ten wells, including the Sibiri exploration well and one appraisal well, complete ongoing projects, invest in maintenance capex to secure the existing assets and continue investments in gas,” the company’s management stated.