Seplat Price Surge Raises Entry Barrier for Retail Investors
Seplat Energy Plc has surged further to become the most pricey oil stocks on the Nigerian Exchange (NGX) at a unit price of N4,103.10 after it gained N373 on each outstanding shares.
The stock broke into All-Time High (ATH) last week due to renewed investment bets on the energy company’s future earnings expectations.
According to data from the Nigerian Exchange, its share price rose by 9.99% during the trading session on Wednesday from N3,730.10 to N4,103.10.
The price surge lifted its market valuation to N2.414 trillion on Friday on 588.444 million shares outstanding in the market. The company’s free float was 29.7% as of the first half of 2024.
The share price increase has further lifted barrier to invest in Seplat shares by investors with thin pockets. It would cost N4 million to own 1,000 units of Seplat.
Shareholders
This company’s influential shareholders control 58.73% of the group shares outstanding now worth N2.414 trillion, based on their latest shareholders profile.
Influential shareholder, M&P group, owns and control 20.46% of Seplat Energy outstanding shares in the market. On the rank is Patrolling group with 13.77% interest in the energy company followed by 9.23% under the belt of Sustainable Capital.
Other shareholders with influence in Seplat are Professional Support Limited and Allan Gray Investment Management Limited with 8.15% and 7.12% shareholdings respectively.
Earnings
In the first half of 2024, Seplat Energy profit before tax increased by 109.5%, amounting to $178.9 million, compared to $85.4 million in the equivalent period in 2023.
The company faced significant increase in taxation during the first half of 2024 which caused it net profit to decline by 39.6% to $49.9 million from $82.6 million in 6M: 2023.
During the period, Seplat generated $226.0 million in cash from its operations, a decrease from the $260.0 million generated in 6M 2023.
Analysts said the slowdown was primarily due to changes in working capital effects, comprised of the reduction in overlift position and revaluation of Naira payables due to devaluation of the currency in the period.
However, there was a significant improvement in cash generated from operations compared to the first quarter and the company anticipates sustained improvement through the year.
Seplat said its net cash flow from operating activities settle at $172.4 million in the first half of 2024, compared to $209.4 million it achieved 12 months earlier..
It also revealed that cash tax payments of $48.8 million and hedge premiums paid of $2.8 million during the current period, were broadly stable on the prior period.
In the comparable period in 2023, the company revealed that its payments were $47.0 million, and the hedging premium paid was $2.7 million.
In financial year 2023, Seplat Energy profit before tax fell by 6.4% to $191.2 million, compared to $204.4 million in 2022.
However, profit after tax grew by 18.3% to $123.9 million in 2023, from $104.7 million in 2022, because of lower taxation during the period. #Seplat Price Surge Raises Entry Barrier for Retail Investors
