By OBINNA EZUGWU

Leading indigenous oil and gas company, Seplat Petroleum Development Company Plc. has posted a profit before tax of N73 billion for the year ended, December 31, 2018, with a promise to grow production drive, increase shareholder yield and capital appreciation, even as the company’s net profit after tax dipped 45 percent.

The company also announced a N228 billion revenue in its full year 2018 results, representing a 65 percent increase from the N137 billion it made in 2017.

The giant company which is listed on both the Nigerian Stock Exchange and the London Stock Exchange, grew its profit before tax significantly by a whopping 480 percent  from N13 billion recorded  corresponding period in 2017.

A review of the company’s 2018 results shows positive performance in the key financial indices. At the close of business year 2018, Gross profit for the period grew 84 percent to N120 billion from N65 billion reported in 2017 December. Operating profit stood at N95 billion, representing a growth of 177 percent over N34 billion recorded in 2017.

However, the company’s profit after tax dipped by 45 percent from N81 billion recorded in December 2017 to N45 billion in December 2018.

In an address to shareholders during the Annual General Meeting held at the Civic Centre, Victoria Island, Lagos on Thursday, the company’s chairman, Dr. A.B.C. Orjiako said Seplat’s operational and financial performance reflected higher year-on-year levels of production uptime at its core oil producing assets combined with a firmer, albeit volatile oil price and increased contribution from the company’s gas business.

“Our results from the previous two years were characterized by the extended period of force majeure at the terminal from February 2016 to June 2017,” he said.

“As we enter 2019, our reliable production base, low unit cost of production and discretion over capital commitments will allow the business to remain highly free cash flow generating and profitable. In the absence of any major interruption or force majeure event, this will enable Seplat to honour its dividend policy and provide an attractive yield to our shareholders in addition to the potential for capital appreciation.”

According to Orjiako, the company will selectively invest in low risk drilling opportunities within the existing portfolio and the continued expansion of the gas business, with 2019 set to be the year that activity intensifies at the large scale Assa-North and Ohaji-South (ANOH) gas and condensate development.

“Seplat remains an ambitious growth-oriented company that is in position of strength to capture inorganic opportunities where we can leverage our competitive advantages to seek out carefully considered, price disciplined and value accretive acquisitions,” Orjiako added.

Also speaking at the AGM, the Chief Executive Officer of the company, Mr. Austin Avuru said: “Seplat has delivered an excellent operational and financial performance resulting in robust profitability and cash flow generation, providing us with solid foundation for growth in the coming years. At our core assets in the West, OMLs 4,38 and 41, the extension of the license to 2038 means that we can confidently plan and invest long into the future to realise the full potential of those blocks.

“As Seplat continues to enhance production and revenue diversification with new wells scheduled at OML 53 in the East, the board took the final investment decision to invest in the large scale ANOH gas and condensate development which will form the next phase of transformational growth for our gas business,” he added. “Disciplined capital allocation continues to remain at the core of our activities as evidenced by our continual deleveraging of our debt levels to the current balance of $350 million.”

Avuru further stated that Seplat’s board has recommended a final dividend of $0.05 per share to all its shareholders.

He said: “In 2018, Seplat reinstated the dividend, increased capital investment and with the resources and the headroom in our capital structure, we are equipped to capitalise on organic and inorganic growth opportunities as they may arise.”

Avuru also announced that the company’s board has taken the Final Investment Decision for the ANOH and Amukpe to Escravos alternate export pipeline which he assured will be completed and fully commissioned in Q2 2019.

The projects, he said, are part of the future expansion moves of Seplat in the country’s oil and gas industry. With the P/E ratio of 5.06 and stock price of N520 per share as at Friday May 17, 2019, investors still have the opportunity to enjoy higher capital appreciation in the short and long term.