Seplat Energy sees huge profit rise and announces special dividends

Seplat Energy Plc, a Nigerian oil company listed in London, has seen its net profit rise by more than five times for the first half of 2026 compared to last year. Billionaire Tony Elumelu bought a 20.1 percent stake in the company just before this year began.

As of 12:46 WAT in Lagos, Seplat's shares increased by 0.6 percent after the release of their results on Thursday. On the London Stock Exchange, the stock has risen by 118 percent in the past year, with a 0.9 percent increase noted at 13:01 BST.

Their latest earnings report shows revenue grew by 15.5 percent, reaching N2.5 trillion. The strong profit increase came more from cost-cutting than from revenue growth. The cost of sales dropped to 55.2 percent of turnover from 65.3 percent.

You could see effective cost management in other spending areas too. General and administrative costs fell by more than one-fifth to N166.4 billion. This was due to cuts in spending on employee benefits and share-based payments.

Also, the net finance cost went down by 24.8 percent to N107 billion as debt servicing eased. The EBITDA margin slipped to 51.6 percent from 52.6 percent.

Roger Brown, the British CEO who will leave his position on Saturday after six years, said, "Our first-half performance benefited from a supportive commodity price environment, translating into strong cash generation." He noted that the recent Middle East crisis helped boost their profits, with Brent crude averaging $86.7 per barrel in the first half of the year, a 23 percent increase from last year.

Seplat sold N2.2 trillion worth of crude oil to buyers like ExxonMobil, Chevron, Shell West, and Vitol in the six months to June. The average price they received for their crude oil rose by 30 percent.

Mr Brown added, "Given the limited visibility on how long these elevated prices may persist, we prioritized balance sheet strength during the quarter, repaying $200 million of our outstanding APF debt, equivalent to 20 percent of gross debt."

Profit before tax increased by 74.1 percent to N790.4 billion, and profit for the period jumped to N225.5 billion from N42.5 billion.

In a different announcement on Thursday, the company declared an interim dividend of USD5 cents per share for Q2 2026, up from USD4.6 cents last year. They also announced a special dividend of USD7 cents.

Seplat expects to pay out as much as USD68.3 cents per share, which totals about $410 million, to shareholders this year. They believe their plan to buy a 10 percent stake in the NNPCL-SEPNU joint venture will enhance shareholder returns.

Last December, Mr Elumelu, who is the chairman of Transnational Corporation Plc and will step down as chair of United Bank for Africa next month, purchased a 20.7 percent stake in Seplat. This stake was previously held by Maurel & Prom Group.

He acquired 120.4 million shares for around $500 million through Heirs Energies Limited and Heirs Holdings. This makes him the largest shareholder in the company now. He will take over as chairman of the board in January when Udoma Udo Udoma steps down.