Genel Energy (GENL) delivered a marked step-up in half-year production numbers and a 15 per cent rise in adjusted cash profit against an increasingly turbulent backdrop. Genel has been operating in the Kurdistan region of Iraq with the military campaign against ISIS virtually on its doorstep. Now a long-standing conflict between Turkey and the PKK - a Kurdish separatist militia - has reignited. Nonetheless, Genel managed to push up its share of average daily production to 88,800 barrels of oil equivalent - a 28 per cent increase since the year-end.
Genel reassured investors that its operations in Kurdistan are "safe and secure". But the main problem remains the $444m (£285m) in the receivables column on the balance sheet. The group is owed millions as the result of delayed payments from officials in Baghdad to the Kurdistan Regional Government (KRG) for oil that has already been exported - a problem that is affecting a number of foreign drillers in the region.
Encouragingly, there is a plan afoot whereby the KRG will make monthly payments to producing oil companies, starting next month. The KRG has also revealed plans to sell exported oil directly - a positive development for companies like Genel.
JPMorgan Cazevove gives an adjusted full-year EPS of 40¢ a share, against a loss of 112¢ in 2014.
| GENEL (GENL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 417p | MARKET VALUE: | £1.04bn | |
| TOUCH: | 416-419p | 12-MONTH HIGH: | 932p | LOW: 347p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 1,511¢* | NET DEBT: | 6% | |
| Half-year to 30 June | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2014 | 192 | 70.7 | 25.2 | nil |
| 2015 | 199 | 31.4 | 11.4 | nil |
| % change | +4 | -56 | -55 | - |
| *Includes intangible assets of $1.7bn, or 683¢ £1=$1.56 | ||||
