Company faithful with debt repayment

THE Oil Search board has agreed to pay an interim unfranked dividend of US4cents (K0.12) per share, compared to the 2016 interim dividend of one US cent (K0.03) per share
According to the company’s first half-year report released yesterday, the payout represented a ratio of 47 per cent.
The company recorded a net profit of US$129.1 million (K401.22 million) which was more than five times the result for the last corresponding period.
Managing director Peter Botten said: “This represents a dividend payout ratio of 47 per cent which is towards the upper end of the range of the board’s dividend policy to return between 35 per cent and 50 per cent of core net profit after tax to shareholders by way of dividend.
“Following taxation amendments in the PNG 2017 budget, which included the removal of an exemption from withholding taxes on earnings sourced from PNG petroleum operations, the 2017 interim dividend will be subject to a 15 per cent withholding tax.
“We continue to hold positive discussions with the PNG authorities with the objective of restoring the exemption for future dividends.”
Meanwhile, the Oil Search balance sheet had strengthened substantially over the first half of 2017, with net operating cash flow of US$419 million (K1.3 billion) during the period.
It was more than sufficient to fund the company’s growth initiatives, scheduled debt repayments and dividend distributions.
Net debt declined from US$3.1 billion (K9.6 billion) at the end of last year to US$2.8 billion (K8.7 billion) at the end of June.