EM CEEMEA CREDIT: Seplat Energy: Q3 Earnings, Supportive
Oct-30 09:01
(SEPLLN; B2/B/B)
- Nigeria’s upstream oil&gas Seplat Energy posted 3Q25 interim results, with expanded scale production supportive of growth. We see this as supportive for credit sentiment. In secondary market, SEPPLLN 9.125 30 chart at 8.60% yield area or z+523bp, that is in line with the spreads seen at previous quarter earnings’ release. The bond launched at 9.125% yield back in March.
- In USD terms, 3Q25 revenues were up 32% q/q at USD779mn on continued crude oil contribution from Seplat Offshore (Oil volumes lifted 10.1MMbbls for the quarter, +28% q/q, 9M at 27.9MMbbls +270% y/y). With 9M prod’n still above mid-point, Co. refined production FY25 guidance to the upper half (130-140kboepd) of previously indicated range.
- Adj EBITDA at USD376.9mn with sequentially improving margin at 51% and cash from operations at USD629.3mn. Higher QoQ capex at USD83.6mn (guidance for FY25 has been narrowed towards the lower end at USD270-290mn, of which: Onshore in upper half of USD180-220mn, Offshore in lower end of USD80-100mn), resulted in strong FCF generation at USD440.4mn. +106% q/q. PBT is sequentially higher at USD 277.2mn, +224% YoY, with 9M +133% y/y.
- Liquidity is solid, with cash & equiv. at quarter end standing at USD579.8mn and UF at USD350mn. Net debt of USD385.9mn leaves with rolling net leverage at 0.27x, trending lower sequentially and vs YE24 (guidance confirmed at below 2.0x, with debt covenants at 3.0x).
- For reference, back in June Moody’s upgraded to B2, citing as direct rationale for its action Nigeria’s sovereign upgrade to B3, announced on May 30. Seplat Energy’s ratings are capped one notch above the sovereign, which at B2 is where it has landed. We note that it is in line with Nigeria’s CC LT Foreign Currency Debt at B2. No rating changes in Q3.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
EUR: FX Exchange Traded Option
Sep-30 09:00
Weekly Thursday Expiry Exchange traded Option, Doesn't Cover NFP, suggest a new very short term Option, playing the US Gov Shutdown.
- EURUSD (2nd Oct) 1.1975c, bought for 0.00025 in 1.6k.
SWAPS: German Spreads Little Changed, Consolidating Recent Gains
Sep-30 08:55
Little change in the major German swap spreads & ASWs on the day, with bond yields essentially flat as German FI stabilises away from session lows that came around the time that the German regional CPI data crossed (data was in line to slightly firmer than expected).
- The major swap spreads & ASWs have edged higher in recent days, with outright bonds also firming, but remain within their respective multi-month ranges, aided by some risk-negative inputs (most recently the increase in U.S. government shutdown odds).
- This backdrop, coupled with relatively benign funding market conditions, has promoted steady outperformance for bonds vs. swaps.
- On the funding market front, Commerzbank note that “repo markets remain calm with the quarter-end being digested very smoothly, specials and GC richening modestly over the reporting date, while large movements remained absent.”
FOREX: Yen Recovery Extends, GBPJPY Testing Below 50-day EMA
Sep-30 08:51
- Rising odds of a US government shutdown following the remarks from VP Vance have continued to weigh on the US dollar to start the week. USDJPY has been hardest hit, extending the week’s pull lower to around 1.3% at typing as spot consolidates back below 148.00.
- The move down appears technically corrective and initial support to watch lies at 147.59, the 50-day EMA. Stronger pivot support has been defined at 145.49, the Sep 17 low.
- We did highlight GBPJPY as a potentially vulnerable candidate to further yen demand, and the significance of the 50-day EMA. The cross is currently attempting to break below the average, which intersects at 198.98, and the next downside target would be 195.04, the August low.
- While the US shutdown and potential implications for US data releases remains the focus, it is worth highlighting that overnight the BOJ released the summary of opinions. The disclosures gave no clear signal of an October move, with most members aside from Naoki Tamura and Hajime Takata – who dissented and proposed a hike – seeing little urgency.
- Still, some members cited diminishing external risks and rising domestic pressures as reasons to shift. "Given this, the Bank may return to its monetary policy stance to raise the policy interest rate, and adjust the level of real interest rates that are currently low compared with overseas economies.”
