Seplat Petroleum Revenue Drops 34.2% In H1, 2020.
Seplat Petroleum Development Company Plc, the Nigeria’s leading indigenous energy company has reported a revenue shortage of 34.2 percent in its half year (H1) 2020 financial result.
The company’s consolidated H1 financial report which was released Wednesday on the Nigerian Stock Exchange website, revealed that the oil firm revenue was down by $234 million from $355.1million recorded last year as a result of lower oil prices and demand.
The company’s Gross profit consequently dropped from $207million to $37.7million in 2020 indicating 81.8 percent dip
However, the company’s Cash increased to $343 million despite lower revenues. While Net debt steady at $457 million with most maturities after 2021.
Futher analyses shows that the Provision reverses operating profit of $33 million to operating loss of $113 million.
While commenting on the result, Chief Executive Officer, Austin Avuru said: “Seplat has delivered a robust performance despite the unprecedented crises we have experienced since March. Our continued resilience is possible as a result of our financial strength, our careful management of risk and our prudent approach to capital allocation. Unlike many in our industry, we were able to protect our 2019 dividend and increase our capital investment to ensure continued growth”.
“Our oil hedging strategy and gas revenues continue to protect the business from price volatility, we are achieving substantial cost reductions from our suppliers and are managing our own costs even more carefully in this challenging period”.
He further stated, “Thanks to the excellent relationships we have with our Government partners and supply chain, our NPDC receivables have fallen and we are managing our payments equitably. The cash position is also robust because our careful management of debt has ensured that the majority of obligations mature in 2022 and 2023”.
Seplat stated that, ”We maintain our previous guidance of 47,000 to 57,000 boepd and remain confident of market recovery in the coming months. We have significant cash resources available and will continue to manage our finances prudently in 2020, expecting now to invest US$120 million of capital expenditure across the full year (of which US$86 million has already been invested), including two new gas wells to be drilled in H2.
“The timely completion of the ANOH project remains a major priority, despite the COVID-19 crisis and we recently launched a financing RFP that has already generated significant expressions of interest”.
Seplat’s hedging policy continues to focus upon assuring appropriate levels of cash flow in times of oil price weakness and volatility.
At a national level, Seplat was one of 33 organisations that donated a combined total of US$30 million to support the Federal Government’s efforts at curbing the spread of the pandemic.
In addition, Seplat has provided food assistance, medical and protective equipment worth N50 million to help local State authorities.
The Company stated, “We will continue to monitor the rapidly changing dynamics and the impact of COVID-19 to comply with all State and Federal Government directives to help protect the health and safety of our stakeholders”.