Why, you might ask, does Genel Energy (GENL) trade at less than a fifth of its net asset value (NAV)? The answer - to which these half-year results again attested - is that for all its reserves, Genel is entirely reliant on thinning sales to a customer with a very scrappy track record. So while interims showed a smoother period of monthly payments from the Kurdistan Regional Government, Genel still faces a lot of uncertainty, due to the crippling economic strains facing its key state partner.
All told, the oil producer received $119m (£90m) for its oil in the six months to June, which at least allowed it to develop its work programme through cash flows rather than a further expansion of debt, which was largely unchanged from the end of 2015. Despite this, shareholders have been told that production is unlikely to pick up much beyond the 56,400 barrels a day in which Genel had a working interest over the reported period.
Broker Numis Securities expects a pre-tax loss of $40m in the year to December 2016, giving a loss per share of 14¢ (against losses of $1.16bn and 417¢ in 2015).
GENEL ENERGY (GENL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 100p | MARKET VALUE: | £278.4m | |
| TOUCH: | 99.8-100.5p | 12-MONTH HIGH: | 441p | LOW: 72p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 924¢* | NET DEBT: | 9% | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2015 | 199.3 | 31.4 | 11.4 | nil |
| 2016 | 91.1 | -4.2 | -1.5 | nil |
| % change | -54 | - | - | - |
*Includes intangible assets of $1.69bn, or 605¢ a share £1=$1.32 | ||||
