SEPLAT PLC Company Update - Additional shares listing berths with some dilution


Friday, February 02, 2018 /2:25 PM /Vetiva 

· Lists 25 million additional shares on the exchange
· Positive outlook unchanged, SEPLAT well positioned for a good FY’18
· Dilution in EPS due to higher number of shares
· NAV/share revised to $1.60 (Previous: $1.67). TP revised to 727.33 (Previous: 749.16) on grounds of increased number of shares outstanding. 

Lists 25 million additional shares in line with pre-approved plans
SEPLAT earlier today announced the listing of an additional 25,000,000 ordinary shares (c.4.4% of existing shares) on the Nigerian Stock Exchange, effectively taking the company’s share capital to 588,444,561 ordinary shares of 0.50k each. The shares all have voting rights and are particularly allotted to the Management and Directors of SEPLAT in furtherance of the Company's Long-Term Incentive Plan. The corporate action is fully within the jurisdiction of the powers granted to the Board of Directors by the company’s shareholders at the Annual General Meeting held on 30th June 2014 - to implement the Initial Public Offer (IPO) award and other remuneration of the top Management and Directors as disclosed in the IPO Prospectus. 

Positive outlook maintained amidst slight dilution
We maintain our previous views on the fundamentals of SEPLAT. The company is well positioned for a good FY’18. Supporting this view is our cautious optimism of sustained peace in the Niger-Delta region amidst FG’s continuous engagement with the militants. SEPLAT’s export de-risking projects further add to security of its earnings recovery outlook. In 2017, SEPLAT completed an upgrade and repair of two jetties at the Warri refinery, taking the jetty export capacity to 30,000 bpd (gross), up from 15,000 bpd pre-upgrade. Work is also ongoing on the 160,000 bpd Amukpe to Escravos pipeline. The operator of the pipeline, Pan Ocean Oil Corporation, announced in early December that the project had been rescheduled to come on stream before the earlier guidance of H1'18. 

Proshare Nigeria Pvt. Ltd.

However, due to the increased number of shares arising from the additional listing, our per share forecasts have been revised. Following the update, our FY’18 EPS now stands at $0.24 (Previous: $0.25, FY’17E: $0.06). Our NAV/Target Price (considering 2P assets only) has also been revised to $1.60 (Previous: $1.67). At current NAFEX rate of NGN360.57/USD, our NAV translates to 727.33 (Previous: 749.16). 

We maintain a HOLD rating on SEPLAT.

 Proshare Nigeria Pvt. Ltd.

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