Nigerian oil and gas company, Seplat Petroleum, has reported a loss of $105.8 million in its unaudited first quarter results. This was 396 percent decline from profit before tax of $35.8 million published in Q1 2019.
According to the interim results for Q1, the loss was mainly driven by a $145.5 million impairment loss during the period, compared with the same period of last year, where there was a gain of $14 million charged on its oil and gas assets.
Also, the first three months of this year, the company’s gross profit fell by 59 percent to $33.1 million from $81.4 million in Q1 2019 just as revenue also declined by 18.2 percent from $159.5 million in the first quarter of 2019 to $130.5 million in Q1 2020.
Speaking on the results, the CEO of Seplat, Mr Austin Avuru, said, “Against the twin crises of significantly reduced oil demand and the price war, Seplat continues to demonstrate its resilience because of its ongoing philosophy of prudent financial management, the careful mitigation of risk and a keen focus on managing factors of the business that are within our control.
“We have the benefit of long-term contracted gas revenues that are insulated from oil market volatility. We are achieving substantial cost reductions from our suppliers and managing our own costs even more carefully in this unprecedented and challenging period.
“We are in constant dialogue with partners on monies owed and are pleased to report that our cash flow remains robust and we have significant cash in reserve.
“This, coupled with the majority of our debt repayment obligations extending beyond 2021, gives us confidence that we can continue to operate comfortably within the covenants on all lines of debt.”
To assist with the COVID-19 pandemic, Mr Avuru added that the company has provided medical and food donations as part of its ongoing commitment to local and state communities.
“We will continue to do whatever we can to support those upon whom we depend for our business.
“The challenges before us remain significant, but through our extensive scenario planning, we are confident that the resilience and discipline of our business will help us through this unprecedented time and strengthen our position as Nigeria’s leading independent oil and gas producer,” he stated.
According to the interim results for Q1, the loss was mainly driven by a $145.5 million impairment loss during the period, compared with the same period of last year, where there was a gain of $14 million charged on its oil and gas assets.
Also, the first three months of this year, the company’s gross profit fell by 59 percent to $33.1 million from $81.4 million in Q1 2019 just as revenue also declined by 18.2 percent from $159.5 million in the first quarter of 2019 to $130.5 million in Q1 2020.
Speaking on the results, the CEO of Seplat, Mr Austin Avuru, said, “Against the twin crises of significantly reduced oil demand and the price war, Seplat continues to demonstrate its resilience because of its ongoing philosophy of prudent financial management, the careful mitigation of risk and a keen focus on managing factors of the business that are within our control.
“We have the benefit of long-term contracted gas revenues that are insulated from oil market volatility. We are achieving substantial cost reductions from our suppliers and managing our own costs even more carefully in this unprecedented and challenging period.
“We are in constant dialogue with partners on monies owed and are pleased to report that our cash flow remains robust and we have significant cash in reserve.
“This, coupled with the majority of our debt repayment obligations extending beyond 2021, gives us confidence that we can continue to operate comfortably within the covenants on all lines of debt.”
To assist with the COVID-19 pandemic, Mr Avuru added that the company has provided medical and food donations as part of its ongoing commitment to local and state communities.
“We will continue to do whatever we can to support those upon whom we depend for our business.
“The challenges before us remain significant, but through our extensive scenario planning, we are confident that the resilience and discipline of our business will help us through this unprecedented time and strengthen our position as Nigeria’s leading independent oil and gas producer,” he stated.