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.
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.
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