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Positive financial performance for Seypec in 2022   |09 March 2023

Positive financial  performance for  Seypec in 2022   

Seypec’s chief executive Sarah Romain (third right) speaking during the interview (Photo: Joena Meme)

The Seychelles Petroleum Company has contributed R250 million in dividends to the government, following the company’s positive financial performance in 2022.

Only recently named Seypec’s chief executive, Mrs Romain was speaking during an interview yesterday at the Seypec boardroom in the presence of the company’s board chaired by Jennifer Morel.

Seypec, whose mandate is to ensure the security of petroleum supply to meet Seychelles’ energy needs recorded a turnover of US $480.3 million, with a net operating profit of US $46.4 million.

“Having sold just over 300,000 metric tonnes of products throughout the year, precisely 303,929 metric tonnes, the year 2022 was a really good one for the Seychelles Petroleum Company (Seypec),” chief executive Sarah Romain explained, while the company’s net profit before tax amounted to US $23.1 million.

This, Mrs Romain said, goes to show that Seypec is a profitable company which contributes towards the country’s economy.

“The business taxes which we pay on our imports, and taxes collected on fuel amounted to around R792.6 million, which we have contributed to the government, with the majority of this being excise tax which we collected on fuel,” Mrs Romain explained.

She said the company’s success is partly attributed to record profits from its fleet of tankers that raked in US $25 million in profits over the past year, following a spike in transportation fees for petroleum products, one of the main implications of the Russia-Ukraine war.

With four clean-product tankers operating in Europe, namely Seychelles Pioneer, Seychelles Progress, Seychelles Prelude and Seychelles Patriot, the Seypec’s fleet has benefitted from the spike in transportation rates.

The shortage of tankers in Europe is especially beneficial to the company, although it is currently weighing up whether to replace its ageing fleet.

Seypec also prides itself on having maintained fuel supply over the course of the year, in light of the uncertainty looming over the world as a result of the war.

Mrs Romain also explained that neighbouring countries like Mauritius and Sri Lanka faced difficulties in terms of availability and substantial price hikes, but despite reaching a high of R25.20 per litre of fuel in 2022, Seypec is satisfied that it was able to maintain local stocks.

She said over the months, the price of fuel has gradually dropped and is now back to pre-pandemic levels, at R20.60 per litre.

In terms of subsidies, she said Seypec subsidises liquefied petroleum (LPG) gas used by the local market in household cooking applications, with the cost per kilogramme of LPG gas being R20.75, although consumers are presently paying R17.50 per kilogramme.

Furthermore, the company subsidises its Praslin operations, and despite using one of its five tankers, the Seychelles Paradise to transport products to Praslin, the cost of doing so is absorbed by the company.

Mrs Romain also added that the local public transport provider, the Seychelles Public Transport Corporation (SPTC) also benefits from subsidies as Seypec supplies it with fuel at the same cost price from the supplier.

“Improving operational efficiency through investments and projects remained high on the agenda last year,” noted Mrs Romain who added that in addition to the renovation of the Beau Vallon petrol station, the company upgraded a number of vehicles in its fleet, along with its depot tanks.

Seypec also contributed R250 million in dividends to the government in 2021, and  according to Mrs Romain, the company was hardest-hit in 2020 when the pandemic was at its peak, suffering from a 95 percent reduction in JET A-1 fuel.

She however explained that the company has a reserve which it can tap into to honour its dividend commitment to government if necessary.

In terms of challenges for the company, Mrs Romain mentioned volatility of fuel prices globally, and fluctuations in the foreign exchange rates.

She also noted that as marine bunkering is also a significant revenue stream for Seypec, accounting for around some 50 percent of revenues, capping and quota policies on tuna also poses a challenge and it means the company loses out on sales of around 20,000 metric tonnes of product during the months when vessels are not operational.

“Amid the various challenges, Seypec is expected to perform as well this year, and is on the right path,” noted Mrs Romain, who further added that the tankers are still performing well, and the fisheries sector is still very much alive.

“As for our international sectors, we are observing an increase in airlines, with Emirates Airline recently announcing that it will be increasing its fuel intake from us. These increases will impact on our sales and indicate that we are on the right path to perform positively,” concluded Mrs Romain.


Laura Pillay

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