24th Mar 2016 08:08
LONDON (Alliance News) - Seplat Petroleum Development Co PLC Thursday said its profit plummeted in 2015 as a significant rise in production failed to offset the fall in oil prices, prompting the company to cut its dividend by almost half.
The oil and gas company focused on Nigeria said its pretax profit fell 65% in 2015 to USD87.1 million from the USD252.3 million profit booked in 2014 following a 29% decline in revenue to USD570.5 million from USD775.0 million.
The company's cost of sales still increased in the year despite the fall in revenue, which led its gross margin to be squeezed. Gross profit in the year fell to USD248.8 million from USD459.4 million after a 2.0% rise in its cost of sales.
General and administrative expenses were slashed to USD121.5 million from USD151.6 million, and the company also reported a foreign exchange gain of USD7.8 million in 2015 compared to a USD17.2 million loss last year.
However, finance costs were considerably higher in the year, totalling USD83.6 million compared to only USD49.3 million the year before.
The dramatic drop in profit has led Seplat to severely cut its dividend for the year to USD0.08 per share, a 47% drop from the USD0.015 paid in 2014.
Seplat managed to increase production in 2015 by an impressive 41% to 43,372 barrels of oil equivalent per day, which was also ahead of guidance, but it was not enough to offset the fall in oil prices in the year.
The average oil price in 2015 was 47% lower at USD51.2 per barrel from USD97.2 per barrel in 2014, but gas prices went in the opposite direction and rose 34% in the year to an average of USD2.55 per million standard cubic feet from USD1.9 in 2014.
Seplat said production this year will be in the region of 41,000 to 48,000 barrels of oil equivalent per day, comprised of 23,000 to 28,000 barrels of oil and between 18,000 to 20,000 barrels of oil equivalent from the gas production.
Cash at the end of the year stood at USD326.0 million whilst net debt amounted to USD573.0 million.
By Joshua Warner; [email protected]; @JoshAlliance
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