Seplat Energy Declares US3 Cents Interim Dividend Amid 59.3% Dip in PBT

Seplat Energy Plc has announced that it would pay its shareholders and interim dividend (H1’2023) of United State Three Cents (US3 Cents), despite a sharp decline in Profit Before Tax (PBT) in H1’2023. The Company’s financial statement made available on The Exchange’s (NGX) website on July 28, 2023, shows that the Oil & Gas giant increased its revenue marginally within the period by 3.8% to $547 million compared with $527 million in the first six months in 2022.  Seplat Energy is a Nigerian independent energy company listed on both the Nigerian Exchange Limited and London Stock Exchange.

While Gross profit inched higher by 0.7% to $276.3 million from $274.3 million, Earning Before Interest, Tax, Depreciation, and Amortization (EBITDA) went down by 31.2% to $235.8 million from $342.7 million recorded in the same period of 2022.

Net result

Profit before tax declined by 59.3%, amounting to $85.4 million, compared to $209.9 million in 6M 2022. However, the profit decline was mitigated due to lower taxation in the current period, resulting in a closing profit of $82.6 million, as opposed to $83.3 million in 6M 2022. The profit attributable to equity holders of the parent company, representing shareholders, was $43.5 million in 6M 2023, which resulted in basic earnings per share of $0.07 for the period (6M 2022: $0.14/share).

Cash flows from operating activities

During the period, the Company generated $259.1 million in cash from its operations, a decrease from the $330.1 million generated in 6M 2022 because of lower oil prices.

Net cash flows from operating activities amounted to $209.4 million in 6M 2023, compared to $284.3 million in 6M 2022. This figure considers tax payments of $47.0 million and a hedging premium of $2.7 million during the current period, while in the previous year, tax payments were $41.1 million, and the hedging premium paid was $4.7 million.

The Company received $172 million in the first half of 2023 towards settling cash calls. This progress led to the reduction of the net NEPL receivable balance, which now stands at $89 million.

Cash flows from investing activities

In the first half of 2023, the total net cash outflow from investing activities was $81.4 million, which decreased from the $200.4 million recorded in 6M 2022.

The capital expenditure during the period was $87.2 million, including $62.1 million invested in drilling activities and $25.1 million invested in engineering projects.

The Company received $3.3 million from All Grace Energy regarding the divestment from the Ubima field. This payment brought the total amount received to $21.9 million out of the total settlement sum of $55.0 million.

Cash flows from financing activities

Net cash outflows from financing activities were $111.3 million, which increased from the $64.2 million recorded in 6M 2022.

These outflows included $32.9 million for interest on loans and borrowings, reflecting the cost of servicing the Company’s debt obligations. Additionally, a commitment fee of $2.4 million was incurred on our credit facilities.

The loan repayments of $11.0 million during the period represent the first principal repayment of the Eland Senior RBL Facility. During the period, shareholders were paid dividends amounting to $61.8 million (6M 2022: $28.2 million paid).

Liquidity

The balance sheet continues to remain healthy with a solid liquidity position. Seplat Energy ended the first quarter with gross debt of $761.0 million (with maturities in 2026 and 2027) and cash at bank of $380.7 million, leaving net debt at $380.3 million. The restricted cash balance of $24.9 million includes $8.0 million and $15.2 million set aside in the stamping reserve and debt service reserve accounts for the revolving credit facility.

As the Company continuously reviews its funding and maturity profile, it continues to monitor the market in ensuring that it is well positioned for any refinancing and or buy back opportunities for the current debt facilities – including potentially the US$650 million 7.75% 144A/Reg S bond maturing in 2026.

Interim Dividend

Seplat, today announced an interim dividend at a rate of US3 cents (United States Three Cents) per Ordinary Share (subject to appropriate WHT) to be paid to SEPLAT’s shareholders whose names appear in the Register of Members as at the close of business on 17th August 2023.

The Company noted that to enable its Registrar, Datamax Registrars Limited, prepare for the payment of the interim dividend, the Register of Shareholders will be closed on 18th August 2023.

The qualification includes shareholders whose name appears in the Company’s book by close of business on 17th August 2023. While for the London Stock Exchange, the Associated Record Date will be 17th August 2023 and the Ex-Dividend date will be 16th August 2023.

Seplat remarked that the dividend will be paid in Naira and US Dollars only. The default currency for the dividend will depend as follows: Shareholders holding their shares on the Nigerian Exchange Limited without a valid Nigerian Certificate for Capital Importation (“CCI”) will be paid their dividend in Naira as the default currency; Shareholders holding their shares on the Nigerian Exchange Limited with a valid CCI will be paid their dividend in US dollars as the default currency.

However, those shareholders may instead elect to receive their entire dividend payment in Naira (partial elections are not permissible). Evidence of the CCI must be provided to Datamax Registrars Limited; and Shareholders holding their shares through depository interests on the London Stock Exchange will be paid their dividend in US dollars as the default currency.

The shareholders holding their shares on the Nigerian Exchange Limited who hold a valid CCI should notify SEPLAT’s Nigerian Registrars, DataMax Registrars Limited (“DataMax”), of that fact.

The exchange rate for the Naira amounts payable will be determined by reference to the relevant exchange rates applicable to the US dollar on 16th August 2023 and will be communicated by the Company on 17th August 2023.

The interim dividend will be paid electronically to shareholders whose names appear on the Register of Members as of 17th August 2023, and who have completed the e-dividend registration and mandated the Registrar to pay their interim dividend directly into their Bank accounts, on or around 30th August 2023.