Proactive Investors - Genel Energy PLC (LON:GENL) chief executive Paul Weir today, in the firm’s results statement, told investors that it is now “a leaner, simplified company that retains clear objectives” – to generate resilient and sustainable cash flows, whilst diversifying by adding new assets.
“We have continued the journey that we commenced in 2022 to, firstly, refocus the business on areas where it can be profitable and deliver shareholder value and, secondly, optimise the organisation to create a reshaped and resilient business with the potential for transformational value accretion through several catalysts,” Weir (LON:WEIR) said.
“We have reduced our workforce and cut costs significantly, exited the Sarta and Qara Dagh licences, worked with our operating partner to develop a new income stream from local sales, and spent considerable time defending our contractual rights under the Bina Bawi and Miran PSCs, where we invested over $1.4 billion before their termination in December 2021.
“These actions mean that we are now well positioned in 2024, with a reshaped and resilient business and a strong balance sheet.”
He added that, in the absence of a value-accretive M&A deal, the company expects to retain at least $100 million of net cash.
Today’s results statement covers a period impeded by the continuing suspension of oil and exports from the Kurdistan region.
As such, 2023 saw a marked reduction in production and revenue for Genel. It generated $84.8 million of revenue for the period, from $401.9 million in the prior year, whilst earnings (EBITDAX) was reported at $32.8 million, from $349.1 million.
The company marked an operating loss of $19.2 million, whilst cash flow from operations amounted to $55.1 million – and it reported a free cash outflow of $71 million.
Genel ended its financial year holding $363 million of cash, with the net cash position reported at around $120 million and net debt stood at $248 million.
Noting potential upcoming value catalysts, Genel told investors that the reopening of the export route would materially increase cash generation, adding that the company is presently overdue a $107 million payment of oil sales between October 2022 to March 2023.
The international arbitration over the Miran and Bina Bawi assets could also unlock significant additional value.