Seplat Energy has released its unaudited Q3 2024 results, reporting an impressive 532.15% year-on-year (YoY) growth in profit before tax (PBT) to N122.663 billion.
This strong quarterly performance contributed to bringing the nine-month PBT to N366.711 billion, reflecting a 483.43% YoY growth.
Revenue also surged, with Q3 2024 revenue rising 148.18% YoY to N495.845 billion, compared to N199.796 billion in Q3 2023.
For the nine-month period, revenue reached N1.071 trillion, representing a 124% YoY increase.
In line with its dividend payout trend, the company declared a dividend of US$3.6 cents per share, representing a 20% increase.
Key highlights (2024 Q3 vs 2023 Q3)
- Revenue: N495.845 billion +148.18% YoY
- Cost of sales: N211.814 billion +123.52% YoY
- Gross profit: N284.031 billion +170.43% YoY
- Administrative expenses: N66.334 billion +135.52% YoY
- Operating profit: N126.163 billion +305.54% YoY
- Net finance cost: N28.544 billion +146.51% YoY
- Loss after tax: N15.284 billion -412.11% YoY
- Earnings per share: N3.91 +31.21% YoY
- Cash and Cash equivalents: N694.610 billion +71.58%
- Total Assets: N5.235 trillion +71.45%
- Total Equity: N2.798 trillion +73.49%
Key Financial highlights:
The strong growth across metrics in Naira can be attributed to the exchange rate depreciation, which significantly inflated the Naira value of revenues, profits, and margins despite a decline in performance when measured in constant currency (USD).
This currency effect, along with premium price realizations above Brent and favourable gas pricing, supported robust Naira-based financials, even though the dollar-reported figures declined.
In constant currency (USD) for the nine-month period, according to the notes to the financial statements:
- Total revenue declined by 11.7% to $715.5 million, reflecting lower liftings and a drop in gas production.
- Oil revenue fell by 12.7% to $625.2 million, driven by a 13% decline in crude liftings (7.54 MMbbl vs. 8.66 MMbbl in 9M 2023).
- Gas revenue dropped by 4.0% to $90.2 million, despite a 10.8% increase in realized gas prices (rising to $3.18/Mscf from $2.87/Mscf).
- Adjusted gross profit grew by 25.9% to $363.3 million, due to lower cost of sales, although unadjusted gross profit declined by 14.7%.
Notwithstanding, the balance sheet remains healthy, characterized by a solid liquidity position above 1 and a lower equity multiple of 1.87.
Roger Brown, Chief Executive Officer, emphasized:
“The first nine months of 2024 have seen Seplat Energy deliver a strong operational performance. Production has been consistent, drilling has improved, and our main maintenance activities have been executed successfully.
“We have brought two new fields on stream, most recently Abiala, and are approaching completion of the Sapele gas plant. Further delays to the startup at ANOH are frustrating, but we have been pleased to see the commitment of our government partner in tackling the technically challenging river crossing. Based on the latest estimates received, and maintaining a cautious stance on any risk of further delays, we update our guidance for first gas to Q2 2025.”
In addition to the Q3 dividend payment, the company is poised to pay the last quarterly dividend. The company stated: “Following board consideration and approval, we are pleased to announce a 20% increase in our quarterly core dividend payment to US3.6 cents per share, effective from Q3 2024.
“This level has also been committed for Q4 2024, resulting in a total core dividend of US 13.2 cents per share for the year, representing a 10% increase over 2023. This dividend increase reflects the strength of our underlying business and does not factor in any potential enhancements in shareholder value.”
- Overall, Seplat Energy’s performance in the first nine months of 2024 illustrates a company navigating complex market dynamics.
- While the company reported strong revenue growth and profit before tax, increased tax liabilities ultimately led to a loss after tax of N15.284 billion.
- However, the ability to declare increased dividends amidst these operational challenges suggests management’s confidence in the underlying business.
- The share price returned 110% year-to-date last year and has so far gained 147% year-to-date this year as of the close of trading on October 29, 2024.
