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Seplat holds onto dividend

Gas prices remaining flat last year meant Seplat revenue stayed at three-quarters of what it was in 2019, much better than many others in the industry
Seplat holds onto dividend
  • Seplat to pay out total 2020 dividend of 10¢, the same as last year
  • Profits hit by impairments and low oil price

Nigeria oil and gas producer Seplat Petroleum Development Company (SEPL) has recorded a $32m (£23m) operating loss because of the collapse in oil prices last year, but managed to hold onto its dividend and positive operating cash flow.

Seplat saw sales fall by almost a quarter last year, to $531m. This decline was far less than the 38 per cent decline in its realised oil price of $40 for 2020 because the company also produces a significant amount of gas, the price of which did not fall on the year before. 

Excluding lease liabilities, net debt was down slightly compared to the end of 2019, at $440m, although Seplat repaid $100m of one loan. Refinancing “all or a portion” of the company’s debt remains a management focus, Seplat said. 

Chief executive Roger Brown said the company had “continued to honour [its] commitment to shareholders of a regular income stream” despite the low oil prices by keeping the dividend at 10¢ for the year. 

The next milestone for the company is finishing the 50-per-cent-owned ANOH gas plant in the next 12 months, for which it raised $260m in February.

Seplat's production mix and shift to more gas through ANOH is a positive, as is its commitment to the payout. Hold. 

Last IC View: Hold, 57p, 31 Jul 2020

SEPLAT PETROLEUM DEVELOPMENT COMPANY (SEPL) 
ORD PRICE:83pMARKET VALUE:£ 487m
TOUCH:82-83p12-MONTH HIGH:108pLOW: 37p
DIVIDEND YIELD:8.6%PE RATIO:NA
NET ASSET VALUE:277¢NET DEBT:27%
Year to 31 DecTurnover ($m)Pre-tax profit ($m)Earnings per share (¢)Dividend per share (¢)
2016254-173-29nil
201745244.047nil
20187462632615.0
20196982934610.0
2020530-80.2-1310.0
% change-24---
Ex-div:03 May   
Payment:28 May   
£1=$1.40