MEET FRANK OSHANUGOR
By Frank Oshanugor
Nigeria’s leading indigenous oil company Seplat Energy Plc has delighted shareholders with news that it will increase its quarterly dividend by 20% from US 2.5 cents per share to US 3.0 cents per share.
The revelation came in its statement of results for the first three months of 2023, which announced revenues up 37% to US$331 million and the bottom line up a whopping 189% to $57.5 million.
While revenues grew 37%, the company’s analysis reveals that cost of sales rose by just 6.6%, meaning gross profits surged by 69% to $198.3 million at a margin of 60%, compared to 48% in the first three months of 2022.
Delving deeper into the operational update it is clear the company remains extremely professionally managed, despite recent complaints from a handful of malcontents in the shareholder register, who between them own less than 700 shares in the company out of almost 600 million shares in issue.
Seplat again demonstrated why it has adopted the moniker of Nigeria’s leading independent by delivering average daily working interest production of 51,720 barrels of oil and gas equivalent and extending its safety record to 3.8 million person-hours without a single lost-time injury.
Perhaps it is not a surprise then that Seplat was the first African E&P company to be awarded the coveted ISO 55001 Asset Management certification which recognises companies that manage their assets responsibly and effectively throughout their life cycle.
Nigerian and international shareholders will be delighted to see that the Company has increased the base level of its quarterly dividend to US 3.0 cents per share so soon after it announced a special dividend of US 5 cents at its full-year 2022 results in March, for a total dividend to shareholders of US 15 cents for the 2022 financial year. Our analysis shows that this is possible because of the strong cash generation the company achieves, thanks to good management of both operations and cashflow.
Having started the year with $404 million in the bank, Seplat added more than $55 million in the first three months of the year, a laudable achievement that will excite shareholders hopeful of higher returns this year.
In its statement to the Lagos and London stock exchanges, Seplat’s Chairman, Basil Omiyi, went to great lengths to thank the Company’s employees, 98% of whom are Nigerians, for their support. He went on to reassure them “that the Board remains united in its determination to implement the strong corporate governance that will enable us to create a sustainable business that maximises returns for all stakeholders, while delivering an energy transition that drives social and economic benefits for all Nigerians”.
The Company also reminded the market that, as revealed in its recent annual report, it continues to make a commendable and important contribution to Nigeria with its gas production at times powering do30% of our electricity grid and its operations generating close to $1 billion in revenue share for the country and its population in 2022.
Seplat has been in the news recently as victim of what looks like an orchestrated campaign waged in the courts with the collaboration of shareholder stooges who impugn the company’s reputation with baseless and vile accusations for which they have provided no evidence whatsoever.
Their malevolent actions have resulted in the resignation of one of Nigeria’s foremost experts in corporate governance, Professor Fabian Ajogwu, citing recent events and deliberate external interferences which have prevented him from effectively discharging his fiduciary and statutory duties as an Independent Non-Executive Director to the highest standards of corporate governance he has written about and subscribed to.
How will international investors look at Nigeria if a man of such integrity and wisdom is hounded out of the Board? Seplat Energy is a rarity in Nigeria, being listed not just on the Premium Board of the Nigerian Stock Exchange, but also on the prestigious Main Board of the London Stock Exchange, where the highest standards of governance are demanded by investors.
Other home-grown companies wishing to make their mark on the international business stage would do well to follow Seplat’s example and strive for the highest levels of corporate governance and integrity in business, for that is the only way Nigeria will attract investment to create jobs and prosperity for its people.
Those who wish to damage this Nigerian success story, out of petty personal malice or the desire to make a buck from a well-connected sponsor, should reconsider their unpatriotic actions and withdraw. Let Seplat Energy carry on being a beacon of success and good management of which all Nigerians can be proud.