Seplat Petroleum Development Company PLC (SEPLAT) Q3-2020 financials shows a 10.70% decline in revenue arising from a slum of 10.92% in Gas Sales and lack of activities in the gas processing segment of the business. However, revenue from crude oil sales advanced by 7.88% from
N99.08bn to N106.88bn in the current period. Earnings from gas sales however decreased from N32.27bn to N28.74bn between Q3-2019 and Q3-2020 respectively following the global oil crisis triggered by the COVID-19 pandemic.
High Cost of Sales and Operating Expenses Weighed on Profitability.
To further compound the reduction in gross revenue, cost of sales jumped by 47.11% leading to a 60.99% reduction in gross profit. SEPLAT gross profit lowered to
N31.69bn compared to the N81.23bn recorded in the prior period. The company also incurred a higher Selling and distribution expenses pushing operating profit to a loss-making position. SEPLAT recorded an operating of loss of N27.74bn in Q3-2020 in contrast to the N64.81 profit in Q3-2019. Consequently, a loss before tax of N45.49bn was recorded compared to the Profit Before Tax of N56.49bn in Q3-2019. In summary, the company recorded a loss of N33.68bn in Q3-2020.