Seplat, Nigeria’s leading local upstream oil and gas company released its 2015 FY results on the London Stock Exchange today, showing profits dropped 74%. The company which has a dual listing in both the UK and Nigeria reported a profit after tax of about $65.6million (2014: $252.1m). The company reports its earnings in dollars.
The drop in profits was largely a result of the fall in oil prices recorded in 2015. Even though, production rose by 84%, the company still posted a revenue drop of about 28%. The average realised price for the company was $31, a 65% drop from a year earlier.
Despite the drop in profits, the pretax profits beat its forecast by about 22.9%.
Source: ARM Research/Company Financials
Highlights
- Seplat Plc. posted a record output of 55kboed in Q4 15 (+55% YoY).
- However, lower realised prices of $31/bbl (-55% YoY) amidst increase in extraction cost (+25% YoY) and fairly stable administrative expense weighed on operating profit $35 million (-63% YoY).
- A tax charge of $21 million compounded the earnings pressure with Seplat posting Q4 15 loss-after tax of $3.1 million.
- Management have proposed a final dividend per share of $0.04 (N8.00) bringing FY 2015 gross pay-out to $0.08 (N16.00) vs. $0.15 (N30.00) in FY 14.
- Current market price of N308/share implies a 2% premium to our FVE of N301.84 ($1.51).
- ARM upgrade its rating on the stock to a NEUTRAL from SELL.
The post above and its ensuing comments, if any, is purely the opinion of the writer(s). It therefore should never be considered as an investment advise of any sort. If required, readers should please consult a competent professional financial adviser for any investment decision.