Seplat Recovers from Loss, Posts N81bn Profit After Tax

Seplat Petroleum Development Company Plc yesterday announced its audited results for the year ended December 31, 2017, showing a recovery from the loss posted in 2016. Due to several economic headwinds and the shut-in of the Forcados terminal that resulted in lower production, lower oil price realisations and higher costs, Seplat’s revenue fell and eventually led to a loss of N45.4 billion. However, the company has recovered in 2017, posting a revenue of N138.28 billion in 2017, up from N63.38 billion in 2016. Cost of sale rose from N47.08 billion to N73.41 billion, making the firm to end with gross profit of N64.87 billion, up from N16.31 billion in 2016. Finance charges went up to N22.25 billion compared with N18.27 billion in 2016. Profit before tax stood at N13.45 billion, as against a loss before tax of N47.4 billion, while profit after tax is N81.11 billion, a major recovery from a loss of N45.4 billion in 2016. According to the company, going forward, it is looking to deliver on its gas ambitions while final investment decision on the ANOH gas and condensate development within OML 53 is expected to be made in the coming months. “The ANOH project underpins the next phase of growth for the gas business. When completed, Seplat will add around 300MMscfd of gas processing capacity. Additionally, exports via the Amukpe-Escravos export route is likely to resume in third quarter of 2018, significantly de-risking production going forward,” the company said. It also stated an intention to reinstate the firm’s drilling programme and pursue inorganic growth ambitions via possible acquisitions. The Chairman of Seplat, Dr. ABC Orjiako had last year assured shareholders that company had put in place strategies that would improve its financial performance and deliver better value going forward. According to him, the company is actively pursuing alternative crude oil evacuation options for production at OMLs 4, 38 and 41 and potential strategies to further grow and diversify production in order to reduce over-reliance on one particular third party operated export system in the future. “In line with this objective, Seplat successfully implemented, in 2016, an alternative export solution during the second quarter whereby crude oil production from OMLs 4, 38 and 41 is sent via the company’s own 100,000 barrel of oil per day (bopd) capacity pipeline to available storage tanks at the Warri refinery,” he said.