The independent energy firm Savannah Energy (SAVE ) said it has exceeded its guidance set out at the start of 2021, with its Nigerian assets ‘continuing to perform well’ throughout FY21.
Savannah, an African-focused company, has published a strong set of initial results for 2021, reporting $230.5m in revenue for FY21, up 7% on FY20 on a like-for-like basis, ahead of its previously issued FY21 guidance which forecast total revenues to be ‘greater than $205.0m.’
Group cash balance was reported at $154.3m, up 46% versus FY20’s year-end cash balance of $106.0m, as well as net debt of US$370.0m, down 9% versus FY20’s figure of $408.7m.
Cash collections from its Nigerian assets rose 11% year-on-year to $208.2m from $187.4m.
As a result, the Company is updating its guidance on the remaining items to report for FY21.
It said operating expenses plus administrative expenses are at or below the lower end of the guidance range of US$55.0m - US$65.0m, driven by the ongoing control of the cost base.
Savannah said capital expenditure for the financial year is ‘significantly below’ its previous guidance of up to US$65.0m, following the successful drilling of its Uquo 11 gas development well as well as ongoing compression works which are now scheduled to complete in 2022.
Commenting on the firm’s trading performance, Andrew Knott, CEO of Savannah Energy, said: “We have exceeded our guidance set out at the beginning of 2021, with our Nigerian assets continuing to perform well throughout the period. In addition, our financial performance in the year was very strong and operationally we were able to announce new gas sales contracts in Nigeria, as well as commencing first gas sales under the FIPL Afam contract.
Savannah said it has “clearly demonstrated significant underlying asset value creation” since the company acquired the Nigerian assets in 2019. The company highlighted that its 2017 - 2021 total revenues have increased by 65% while cash collections have increased by 92%.
Knott said Savannah will continue to seek to execute its “Projects that Matter” strategy as it continues to review opportunities in the renewable energy space and asset acquisitions.
Outlining the “Projects that Matter” strategy in a previous annual report for 2020, Knott states:
‘’Our purpose is clear: we are seeking to deliver energy projects in the emerging world which are making meaningful positive socio-economic contributions to our host countries.‘’
In a research note, analysts at the UK broker finnCap said Savannah’s FY21 trading update demonstrates “continued progress at its Nigerian operations, with strong growth in gas volumes, revenues ahead of guidance, robust cost controls and net debt levels declining.”
It added: “This should be encouraging for investors as Savannah expands its sphere of operations and looks to deliver growth on multiple fronts – the recently announced Chad/Cameroon acquisitions are highly accretive and set to more than double the scale of the company’s operations, while additional growth opportunities are also being pursued in Niger and a newly formed Renewable Energy division. The future looks very bright for Savannah.”
Follow for more news and updates on Savannah Energy: