Seplat Petroleum‘s Profit After Tax Falls to N45 Billion

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Goddy Egene

The shares of Seplat Petroleum Development Company Plc fell 3.5 per cent yesterday as investors reacted negatively to the audited results of the company for the year ended December 31, 2018. The shares fell from N619.00 to N596.90 per share.

The firm, which is listed on the Nigerian Stock Exchange (NSE) and London Stock Exchange (LSE) yesterday released its audited results. Although the company recorded higher revenue, profit after tax (PAT) fell by 44.6 per cent.

Specifically, Seplat posted revenue of N228.4 billion in 2018, up by 65.2 per cent from N138.3 billion recorded in 2017. Cost of sales rose 48 per cent from N73.4 billion to N108.6 billion, while gross profit jumped by 84.6 per cent to N119.8 billion from N64.9 billion in 2017. Net finance cost fell by 31.8 per cent to N14.3 billion, from N20.9 billion in 2017.

Profit before tax (PBT) increased by 499 per cent from N13.5 billion to N80.6 billion. However, PAT fell from N81.1 billion to N44.9 billion due to debt of N35.7 billion in 2018, compared with a tax credit of N67.7 billion in 2017. The board of directors has recommended a dividend of N18 per share.

The Chairman of Seplat, ABC Orjiako had disclosed plan of the company to invest more in its gas business in last year so as to boost revenue and deliver more returns to investors.

“Our strategy to diversify and grow our sources of income through the expansion of our gas business continues to gain momentum. Since the government launched various initiatives to stimulate investment in the gas sector, including opening the Domestic Supply Obligation (‘DSO’) price to commercial market forces, Seplat has been at the forefront of gas commercialisation and made substantial investments in support of the government’s energy agenda,” he said.

The Chief Executive Officer of Seplat, Austin Avuru had said the company registered strong cash flow performance and significantly strengthened the balance sheet the previous year.

“Our proactive and decisive management coupled with the strong underlying fundamentals of the business have seen us emerge from an exceptionally challenging period a much fitter and stronger business that is well equipped to deliver long-term value for our shareholders,” he said.

Meanwhile, the the three-day bullish run in the domestic equities market was halted yesterday as the NSE All-Share Index declined 0.16 per cent to close at 32,121.74.