NNPC announces second profit of N674b as assets hit N16.27tr

After years of loss-making operations, Nigerian National Petroleum Company Limited (NNPC), yesterday, said it made profit after tax of N674 billion in 2021.

Forty-four years after the deficit spell, President Muhammadu Buhari had announced, last year, that the company made profit for the first time totaling N287 billion.

Yesterday’s breakthrough was contained in a financial document audited by multinational accounting firms, PricewaterhouseCoopers (PwC), SIAO and Muhtari Dangana & Co.

The Group Chief Executive Officer of NNPC, Mele Kyari, while declaring the profit in Abuja, said the development came despite the challenging operating environment.

Kyari said: “Today, I am happy to announce that the board of NNPC Limited has approved 2021 audited financial statements, and NNPC has progressed to a new performance level, from N287b profit in 2020 to a N674b profit after tax in 2021, climbing higher by 134.8 per cent year-on-year profit growth.”

Although Nigeria had managed to pump an expected quota of crude oil since 2021 (a development, which may have impacted the profitability of the company), the price of oil was fair, as the burden of fuel subsidy, usually recorded in the book of the newly limited liability company, was placed on the federation account.

While the oil company is yet to release the full report, there are indications that transfer of fuel subsidy burden off the book of the company might have aided the prevailing profit.

Recall that between January and October 2021, fuel subsidy allegedly stood at N1.03 trillion. The burden went into the federation account instead of the national oil company.

“We strongly believe that NNPC has the potential to sustainably deliver better value to its esteemed shareholders,” Kyari said, adding: “The group financial position recorded an increase in total assets from N15.86 trillion in 2020 to N16.27 trillion in 2021.”

With the current profit, showing that the company progressed in performance level by 134.8 per cent year-on-year growth, its total liabilities decreased by 8.3 per cent from N14.68 trillion in 2020 to N13,46 trillion in 2021.

Coming few days after NNPC acquired Oando’s OVH Energy, a move reportedly aimed at growing the portfolio and profit of the national oil company, the Petroleum Industry Act (PIA) has transitioned NNPC from a corporation to a commercial oriented company, with Kyari boasting it would become the most profitable company in Africa.

While it is yet to be listed on any stock exchange, NNPC might have to compete with MTN Group, Safaricom and Dangote Cement, which are currently the top three in terms of market capitalisation in Africa.

Kyari said the company would have performed better if the year under review were free of incessant vandalism, crude oil and products theft, among others.

He added: “We look forward to achieving greater performance, to support our growth aspirations and create more value for our shareholders as we drive full commercial operations under NNPC Limited.”