6th Aug 2015 07:27
LONDON (Alliance News) - Genel energy PLC Thursday said its pretax profit more than halved in the first half of 2015 despite revenue increasing due to a large rise in production.
The oil company producing from the Kurdistan region of Iraq said pretax profit more than halved in the first half of 2015 to USD31.4 million compared to USD70.7 million a year earlier despite revenue rising to USD199.3 million from USD192.1 million.
The fall in profit was caused by a large rise in depreciation against its assets of USD90.4 million compared to only USD63.1 million a year earlier whilst it also booked USD12.1 million of exploration expenditure in the period. Finance costs also increased to USD24.2 million from USD5.3 million.
However, earnings before interest, tax, depreciation, amortisation and exploration expenditure rose to USD158.1 million in the first half from USD138.0 million a year earlier.
Revenue rose on the back of a large rise in production, which averaged 88,800 barrels of oil per day compared to only 63,000 barrels per day in the first half of 2014.
Genel reiterated its full year guidance to produce between 90,000 to 100,000 barrels of oil per day in 2015 in order to generate between USD350 to USD400 million in revenue based on a USD50 per barrel Brent oil price. Brent was trading at USD49 per barrel on Thursday morning.
Capital expenditure in the first half totalled USD93.3 million, which was mostly funnelled into developing the Taq Taq and Tawke licenses in Kurdistan. That is considerably down from the USD310.7 million spent in capital expenditure in the first half of 2014.
For the full year, capital expenditure is expected to be between USD150 to USD200 million, which Genel said would be down around 70% year-on-year.
At the end of June, Genel's cash balance had fallen to USD473.7 million from USD489.1 million at the end of June 2014, whilst net debt rose to USD216.1 million from only USD2.3 million a year earlier.
Genel shares were down 3.8% to 419.25 pence per share on Thursday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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