Seplat reports 282% revenue growth in 1 year, becomes profitable

By Adesola Afolabi

Seplat Petroleum Development Company Plc. listed on both the Nigerian Stock Exchange and London Stock Exchange, on Monday announced its un-audited first quarter results.

The Nigerian independent oil and gas group reported a 282 per cent growth in Revenue from contracts with customers to N55.2 billion in March 2018 from N14.5 billion reported in the corresponding period of 2017.

Explaining the reported expansion in revenue, the Group said it has adopted IFRS 15 as issued in May 2014 which has resulted in changes in accounting policy of the Group. IFRS 15 replaces IAS 18 which covers revenue arising from the sale of goods and the rendering of services, IAS 11 which covers construction contracts, and related interpretations. The group’s revenue from contracts is inclusive of Crude oil (78 percent) and Gas (22 percent) sales.

The company earned other income of N2.6 billion as against no figure recorded for March 2017 and reduced general and administrative expenses by 17 percent to N4.3 billion from N5.1 billion.

Net gains on foreign exchange improved 8 per cent to N572 million from N529 million over the one year review period, as basic earnings per share increased to N10.68 from a loss per share of N10.39 one year ago.

The company also reported a return to profitability as profit for the review period settled at N6.3 billion from a loss position of N5.9 billion in March 2017.

Statement of the company’s financial position reveal net assets has improved 1.2 percent to N465 billion from N460 billion as at December 2017.

On the back drop of the results, the company’s directors have proposed the payment of an interim dividend of NGN15 (US$D 0.05) per fully paid ordinary share. The aggregate amount of the proposed dividend expected to be paid out of retained earnings as at 31 March 2018, but not recognised as a liability at period end, is 9 billion; USD 29.4million as against none proposed for 2017.

Commenting on the results Austin Avuru, Seplat’s chief executive officer, said: “We have made a good start to 2018. Our core production base remains strong and predictable, the gas business has once again set a new record for quarterly revenue contribution and the steps we took to refinance the balance sheet have significantly strengthened our liquidity position and will allow investments to be scaled up. Our debut bond issuance marks another key milestone for the Company, widening our long term capital base in support of our growth strategy while also reducing overall borrowing costs. Looking ahead we will return to drilling in the second half of the year as we re-focus our efforts on the numerous high-margin and short-cycle cash return opportunities we have in our portfolio. I am also pleased to report that our strong operational and financial performance has resulted in the Board taking the decision to reinstate the dividend for our shareholders. With our capital structure reset and robust free cash flow generation underpinning the business we also have the headroom to capitalise on inorganic growth opportunities as and when they may arise, in line with our price disciplined approach”.