Seplat Energy Reports Strong 2024 Results with 98% Profit Growth
Why we think this is good
Seplat Energy has demonstrated robust financial performance in 2024, with significant increases in profit and revenue. The company's profit before tax nearly doubled, rising 98.4% to $379.4 million, while revenue grew by 5.2% to $1,116.2 million. The acquisition of MPNU, now SEPNU, has expanded the company's asset base and production capacity, albeit with an increase in net debt. However, the Net Debt-to-EBITDA ratio remains healthy at 0.66x, well below the 2.0x target. The outlook for 2025 is positive, with increased production guidance of 120-140 kboepd and a 10% increase in dividend payout. While there are some concerns about higher operating costs and capital expenditure for 2025, these appear to be strategic investments for future growth. The company's strong cash position, improved EBITDA margin, and successful hedging strategy further support the positive sentiment.
Key Points
- Profit before tax increased by 98.4% to $379.4 million
- Revenue grew by 5.2% to $1,116.2 million
- Successful completion of MPNU acquisition, now renamed SEPNU
- Production guidance for 2025 set at 120-140 kboepd
- Total dividend for 2024 increased by 10% to US$ 16.5 cents per share
- Net Debt-to-EBITDA ratio at 0.66x, well below the 2.0x target
- Planned capital expenditure for 2025 of $260-320 million
- Unit operating costs expected to increase to $14.0-15.0/boe in 2025
- Adjusted EBITDA margin improved to 48.3% from 42.2% in 2023
- Cash at bank increased to $469.9 million from $450.1 million in 2023
Summary
Seplat Energy has delivered a strong performance in 2024, with profit before tax nearly doubling to $379.4 million and revenue increasing by 5.2% to $1,116.2 million. The company successfully completed the acquisition of MPNU (now SEPNU), which has expanded its production capacity and asset base. Despite the increased net debt due to the acquisition, the company maintains a healthy Net Debt-to-EBITDA ratio of 0.66x. Looking ahead, Seplat has provided positive guidance for 2025, with production expected to reach 120-140 kboepd, representing significant growth. The company has also increased its total dividend for 2024 by 10% to US$ 16.5 cents per share, reflecting confidence in its financial position and future prospects. However, investors should note the planned increase in capital expenditure to $260-320 million and higher unit operating costs of $14.0-15.0/boe for 2025, which are aimed at improving asset reliability and setting the foundation for long-term growth.