March 1, 2022/FSDH 

Key Performance Highlights:

• Seplat Energy reported FY21 results with revenues jumping 53.8% YoY to 293.6 billion, while the company reported a net profit of  N46.9 billion in FY21 vis-a-vis a loss of N30.7 billion in FY20. Total revenue in FY21 was N293.6 billion versus N190.9 billion reported in FY20. The company witnessed growth in both segments. Oil revenue was N247.7 billion (FY20: N150.4 billion), a 64.6% increase compared to FY20, reflecting higher realised oil prices despite lower production. Gas revenue increased by 13.5% to N46.0 billion (FY20: N40.5 billion) due to higher gas sales volumes, which indicated the new gas wells brought onstream during the period.
   
• The rise in oil revenue reflects higher realised oil prices of $70.54/bbl for the period (2020: $39.95/bbl). The total volume of crude lifted in the year was 8.8 MMbbls, lower than the 10.5 MMbbls lifted in 2020, due to the decrease in production following the suspension of exports at the FOT. The company produced an average of 47,693 bopd in FY21, down 6.8%, as against 51,183 during the last quarter. The Oil production in the third quarter was affected by the curtailment of production and suspension of export operations from OMLs 4,38, 41, and 40 as SPDC declared a force at the Forcados Oil Terminal.
   
• Gross profit shot up 154.8% YoY to N114.2 billion due to higher revenues and less than a proportionate increase in the cost of sales (up 22.8% YoY). The company recorded a 17.2% YoY increase in general and administrative expenses to N32.1 billion on increased expenses from last year, which were lower in the previous year due to the Covid-19 pandemic. Impairment loss on financial assets was limited at N9.0 billion, compared to N10.8 billion in FY20. The company reported an operating profit of N100.4 billion versus an operating loss of N11.4 billion in FY20. The company’s robust operating performance was also boosted by an N29.9 billion impairment reversal on non-financial assets in FY21.
   
• The Group’s tax expense for FY21 was N24.1 billion compared to the N1.8 billion in FY20, resulting from deferred tax expense of N11.4 billion charged against revenues in the third quarter for FY21. The deferred tax charge is mainly driven by the unwinding of previously unutilised capital allowances. Seplat Energy reported a net profit of N47.0 billion versus a net loss of N30.7 billion in FY20. The basic EPS stood at N97.63/share in FY21, compared to a loss of N46.42/ share in FY20.
   
• For 4Q21, Seplat reported an increase in revenue to N111.0 billion, a whopping 100.6% YoY increase from N55.3 billion from 4Q20. The Gross profit shot up 326.6% YoY to N56.1 in 4Q21 billion due to higher revenues and less than a proportionate increase in the cost of sales (up 30.2% YoY). The General and administrative expenses grew 18.3% YoY to N10.7 billion in 4Q21 also, an Impairment reversal on non-financial assets of N29.9 billion was recorded in 4Q21. The operating profit increased by 131.5% YoYto N37.8 billion in 4Q21. The company recorded a profit of N33.0 billion in 4Q21 against N3.0 billion in 4Q20. The earning per share for 4Q21 stood at N45.75/share, compared to N12.51/share in the prior-period quarter.
   
• On 28 February 2022, Seplat announced an interim dividend of US2.5 cents, in line with Seplat Energy’s quarterly dividend distribution timetable. The final dividend will become payable on Wednesday, 25 May 2022, to all shareholders registered in the company’s books at the close of business on Thursday, 5 May 2022.
   
• Seplat acquired Cardinal Drilling rigs for US$36 million as they concluded the legal proceedings with Access Banks. The negotiated US$36 million consideration for the rigs will be funded out of already restricted funds held at Access Bank and the Federal High Court of Nigeria; the acquisition of these rigs, when deployed, will help Seplat to optimise drilling costs for Seplat Energy. Separately, Seplat Energy has also agreed to acquire Mobil Producing Nigeria Unlimited (MPNU) from Exxon Mobil Corporation, Delaware; the completion of the transaction is subject to ministerial consent and other required regulatory approvals.

Market Reaction: The Seplat stock closed unchanged at N859.9 versus a marginal 0.14% gain for the All-Share Index on Friday (28/02). Nonetheless, the stock has appreciated 17.6% (versus 12.7% for the index) since the last quarterly earnings on 29/10.

Seplat Energy Earnings Highlight FY21

Source: Company Financials, FSDH