… Declarers $59m dividend payout
By Peter Egwuatu
Seplat Petroleum Development Company Plc has assured shareholders of sustainable growth despite the effect of the coronavirus, COVID-19 pandemic ravaging the world.
The Chairman of the Company, Dr. A.B.C. Orjiako at its first virtual 7th Annual General Meeting, AGM held in Lagos said: “Seplat remains a resilient business that generates significant free cash flow from a low cost production base.”
While addressing shareholders and other stakeholders during the Company’s AGM, the Chairman said that Board announced a dividend distribution for shareholders with US$59 million paid out in the 2019 calendar year translating to 10 cents per share.
According to Dr. Orjiako : “Amidst the current headwinds occasioned by the prevailing global coronavirus pandemic and low oil prices, Seplat will continue to maintain strict financial discipline over investment decisions, while also embedding high standards of corporate governance and transparency; strong commitment sustainable business; and effective management of risks.
“I believe that Seplat has an important role to play throughout the energy transition that is set to occur in the years and decades ahead, not least through the impact we can have by scaling up our domestic gas supply business and displacing imported diesel fuels that are being burned for power generation and helping Nigeria benefit from the social and economic multiplier effects that reliable and affordable power availability can bring.”
Against this backdrop, Dr. Orjiako said Seplat plans to position itself for an ambitious next phase of growth which would see the expansion of its footprint in terms of energy business activities, a plan to pursue offshore assets acquisition, as well as opportunity driven entry into different geographies.
Meanwhile, the shareholders commended the Board and Management for the improved performance recorded despite the challenging environment.
Also addressing shareholders, the Chief Executive Officer, Seplat, Mr. Austin Avuru, described 2019 as a solid year in which the robust fundamentals of the business once again kept the Company on an extremely solid footing.
He said: “The strong cash generation we realised from our low-cost production base meant that our capital expenditures, debt service obligation and dividend distributions to shareholders were more than covered by cash generated from operations by a comfortable margin.”
On the outlook for 2020, Mr. Avuru said Seplat faces the same challenges as the rest of industry in terms of managing oil price volatility and other macro risks, adding that the emergence of the COVID-19 pandemic has thrown in another variable that has impacted the global economy.
“As these factors are not in our control we can only make sure that we have plans in place that can mitigate and de-sensitise the business to these risks as far as is possible” he noted.
Also commenting, the company’s Chief Financial Officer, Mr. Roger Brown, said a position of financial strength has enabled Seplat to capitalise on significant growth opportunities during the 2019 financial year.
Mr. Brown said: “Our growth strategy is underpinned by a clear financial strategy that aims to maintain a strong well-funded balance sheet with sustainable operational cash flow. Investments made during the year have significantly progressed our ambitious growth strategy for both oil and gas production; of which our core business remains highly cash generative.”
The Seplat CFO further stressed that: “The business is hedged against low oil prices and a significant proportion of our revenues now come from gas, which offers further protection from oil price volatility.”