Seplat Energy’s Profit Plunges by 45% to $27.4 Million

Seplat Energy’s Profit Plunges by 45% to $27.4 Million

Seplat Energy Plc reported a sharp year on year decline in profitability in the first half of 2025, details from its unaudited financial statement posted on the Nigerian Exchange revealed.

Its profit after tax fell by 45.1% year on year to $27.4 million, driven by a sharp rise in net finance costs and tax expenses, according to analysts notes.

Seplat revenue rose by 231.5% year on year to $1.4 billion, bolstered by the consolidation of Seplat Energy Production Nigeria Unlimited (SEPNU), which significantly lifted working interest (WI) production volumes, according to CardinalStone Securities Limited.

Analysts said Working Interest output averaged 134.5 kboepd, representing a 177.9% increase, comprising 54.8 kboepd from SEPLAT’s onshore operations and 79.7 kboepd from SEPNU assets.

Crude oil sales remained the main revenue driver, according to analysts, climbing 2.6x to $1.3 billion on the back of higher oil liftings of 17.8 MMbbls, despite a softer average realised oil price of $72.58 per barrel.

The company’s gas revenue rose 54.5% to $94.6 million, supported by a 60.1% increase in gas volumes to 31.7 Bscf and a marginal improvement in realised gas prices.

Its revenue from Natural Gas Liquids (NGLs) stood at $9.9 million, underpinned by 280.2 kbbl in volumes at an average realised price of $35.3/bbl.

Overall, oil, gas and NGLs accounted for 92.5%, 6.8% and 0.7% of total revenue, respectively. SEPLAT’s cost of sales rose sharply by 280.2% to $913.1 million, driven primarily by nonproduction-related expenses (royalties, depreciation, depletion and amortisation, regulatory fees), which surged by 293% to $607.9 million.

Direct production costs, including crude handling, barging, trucking, and maintenance, also climbed 2.6x to $305.2 million.  Analysts said while these increases reflect higher production volumes, a portion of the costs relates to ongoing project activity across SEPLAT’s asset base and is expected to moderate by year-end.

Consequently, the gross profit margin declined to 34.7% versus 43.0% in H1’24. Operating profit grew by 85.5% year on year to $387.8 million, despite a 138.7% rise in general and administrative expenses.

But ‘other income’ fell by 42.2% year on year to $51.0 million, largely due to a $42.6 million under lift adjustment. As a result, the earnings before interest and tax (EBIT) margin contracted to 27.7% from 49.6% in H1’24.

Seplat Energy’s net finance costs rose significantly, up 168.0% year on year, driven by commitment fees associated with the refinancing of SEPLAT’s senior notes, higher interest expenses on loans and borrowings and a sixfold increase in unwinding charges related to decommissioning provisions.

As a result, the Profit Before Tax (PBT) margin declined to 21.0% versus 42.4% in H1’24. SEPLAT also reported an 105.8% increase in income tax expense which settled at $265.6 million, resulting in an effective tax rate (ETR) of 90.6%.

“This tax rate was determined in line with IAS 34 Interim Financial Reporting, which mandates that interim tax expenses reflect the estimated full-year effective rate applied to year-to-date profits”, CardinalStone Securities Limited said. The elevated ETR reflects the company’s typical front-loaded tax burden and the current outlook on full-year taxable income. #Seplat Energy’s Profit Plunges by 45% to $27.4 Million NNPC Posts N905bn June Profit, Remits N6.96tn in 5 Months to FG