43.73% tax reduction galvanises Seven Energy Q3 profits

A 43.73 percent reduction in tax liability has galvanised Seven Energy Limited’s third quarter (Q3) profit, analysis of the financial statement posted on the company’s website shows.

For the first nine months through September 2014, the company’s net income surged by 987.14 percent to $41.42 million from $3.81 million in the same period of the corresponding year (Q3) 2013.

“The increase in profit was due to the increased production entitlement that the Group recognised as a consequence of increased
expenditure on OMLs 4, 38 and 41,” according to the company’s statement.

Seven Energy’s margins were impressive as net margin, a measure of profitability and efficiency, jumped to 17.22 percent in 2014, from 1.42 percent the preceding year.

Additionally, gross margin increased to 58.34 percent as against 35.52 percent last year, while gross profit rose to $140.33 million, which means the company has a better management of direct costs attributable to projects.

However, the company’s topline was impacted by a slight reduction in output from one of its oil fields as revenue fell by 8.1 percent to $240.52 million from $261.95 million the preceding year.

“Revenue for the period decreased $21 million to $241 million from the comparable period in 2013, due to a reduction in oil lifting’s of $45 million, offset by an increase in gas revenue during the period of $24 million,” said the company’s statement.

Total assets were up by 64.96 percent to $2.26 billion from $1.37 billion, thanks to more acquisition of assets to bolster performance.

Total equity also increased by 48.70 percent to $1.71 billion.

The  Group has completed work  on the 1km pipeline that by-passes the Ibom Power station and is now ready to commence deliveries to the Calabar NIPP power station via a western route to Ikot Abasi, and then along the 128km East Horizon gas pipeline.

Initial gas deliveries will be at a rate sufficient to enable Calabar NIPP power station to proceed with plant commissioning and early power generation.

Seven Energy International Limited is an independent Nigerian integrated oil and gas development, production and gas distribution company founded in 2004.

With the backing of strategic long-term investors and main offices in Lagos and London, the Group has a unique focus on the emerging Nigerian domestic gas market.


Source : BusinessDay

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