- Seplat Plans More Investment, Eyes Asset Acquisition
Seplat Petroleum Development Company Plc, an indigenous independent oil and gas firm, has said it has optimised its capital structure to enable it invest more and continue to pursue its growth opportunities.
The Chief Executive Officer, Seplat, Mr Austin Avuru, who stated this at the firm’s ‘Facts behind the Figures’ presentation at the Nigerian Stock Exchange, disclosed that the company was targeting opportunities to acquire more assets.
Avuru said, “For us, almost everything we do, both in terms of emphasising our corporate governance structure and culture, and how we manage our assets and plan our work programme and budgets, is all about being a company that will consistently deliver natural gas into the domestic market and crude oil for exports.”
He said the firm would continue to manage its bottom line in such a way that “we remain profitable in the interest of all stakeholders, particularly our shareholders.”
He noted that in February 2016, the firm experienced a combination of the drop in crude prices and disruption in Trans Forcados Pipeline that almost led its production to near zero.
Avuru said, “Between that time and now, our emphasis has been to derisk and harvest cash flows. So, even in our work programme, we focus on delivering near-term value, and that has paid off.
“We have also optimised our capital structure. Following this rearrangement in our capital structure, we have headroom to invest more money in the ground. Going forward, between now and 2019 and beyond, we are going to be spending more money. So, we are upscaling our work programme to spend more money.
“We will, of course, continue to pursue our growth opportunities, which will be a combination of organic growth through our capital spend in drilling and appraisal and development wells, and also for any opportunities for acquisition. One of the key things we have targeted with our current capital structure and our balance sheet is to, at a very short notice, be able to participate in any acquisition opportunities.”
According to him, the refinancing of its balance sheet has significantly strengthened the firm’s liquidity position and allow for work programme to be scaled up and focus switch to delivery of growth strategy.
“The communities must feel happy that we are operating in their area. The staff must feel happy that with their contribution towards wealth generation, they have a reward for it. Our shareholders must have sufficient returns either in terms of dividends, capital appreciation or both. That is what we strive to achieve,” Avuru said.
He added, “Our biggest risk to our key business is evacuation. Our primary export facility remains the Trans Forcados, but because we cannot have 100 per cent faith on Trans Forcados, we have built an option of Warri Refinery as a last resort.
“Currently, we have stepped in to co-finance a third party pipeline infrastructure that has been under construction for over five years, and fortunately, that pipeline actually originates from where we are at Amukpe. Once that is completed, it will become our primary evacuation route and Trans Focados will be our secondary evacuation route, and the Warri Refinery becomes the last option.”
Flour Mills of Nigeria Repays N51.64 Billion Series 2 Commercial Paper
Flour Mills of Nigeria Plc (FMN) has successfully repaid its N51.64 billion Series 2 Commercial Paper as revealed in a statement issued by the company.
This follows the earlier repayment of its N13.33 billion Series 1 Commercial Paper in August 2023.
Both the Series 1 and Series 2 Commercial Papers, totaling N64.97 billion, were initially issued on February 22, 2023, under FMN’s N200 billion Commercial Paper Programme.
The Series 1, with a yield of 13.0%, raised N13.3 billion, while the Series 2, with a yield of 14.0%, raised N51.64 billion.
FMN had launched its N200 billion Commercial Paper Programme on February 10, 2023, reflecting the company’s strategic financial planning.
The Group Chief Finance Officer, Mr. Anders Kristiansson, expressed satisfaction with the timely and successful repayment of the Series 2 Commercial Paper.
He emphasized FMN’s commitment to financial prudence and acknowledged the confidence placed in the organization by the investing public.
Kristiansson expressed gratitude to stakeholders for their continuous support, reiterating FMN’s dedication to delivering sustainable value and upholding the highest standards of corporate governance.
In addition to the successful repayment, FMN tapped into the market for its Series 3 Commercial Paper in June 2023, with subscriptions from banks and Pension Fund Administrators, contributing 39.7% and 40.8%, respectively.
The transaction was managed by FBNQuest Merchant Bank Limited as the Lead Arranger, with ChapelHill Denham Advisory Limited, FCMB Capital Limited, and United Capital PLC serving as Joint Arrangers.
African Airlines Projected to Cut Losses to $400m in 2024, Says IATA
The International Air Transport Association (IATA) has forecasted a reduction in losses for Nigerian and other African airlines from $500 million in 2023 to $400 million in 2024.
The Switzerland-based IATA made this projection while presenting the global airline industry outlook in Geneva, Switzerland, on Wednesday.
IATA’s Director-General, Willie Walsh, shared the outlook, stating that global airlines are expected to generate approximately $964 billion in revenue in the coming year.
The report indicated that airline industry net profits are anticipated to reach $25.7 billion in 2024, reflecting a slight improvement over the projected $23.3 billion net profit for 2023.
Despite the challenges faced by the aviation industry in recent years, IATA sees the $25.7 billion net profit in 2024 as a testament to aviation’s resilience.
Walsh acknowledged the impressive speed of recovery but emphasized that the net profit margin of 2.7% remains below industry expectations.
IATA estimates that around 4.7 billion people will travel in 2024, surpassing the pre-pandemic level of 4.5 billion recorded in 2019.
However, Walsh highlighted ongoing challenges, including regulatory burdens, fragmentation, high infrastructure costs, and a supply chain populated with uncertainties.
He emphasized the need for the industry to build a resilient future, given its significant contribution to global GDP and livelihoods.
Fuel prices are expected to average $113.8 per barrel in 2024, accounting for 31% of all operating costs, totaling $281 billion.
Walsh concluded by expressing optimism about more normal growth patterns for both passenger and cargo in the post-pandemic era.
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