After years of loss-making operations, the Nigerian National Petroleum Company Limited (NNPC) yesterday said it made an after-tax profit of N674 billion in 2021.
Forty-four years after the deficit period, President Muhammadu Buhari announced last year that the company was making profits totaling N287 billion for the first time.
Yesterday’s breakthrough was contained in a financial document audited by multinational accounting firms PricewaterhouseCoopers (PwC), SIAO and Muhtari Dangana & Co.
NNPC Group Managing Director, Mele Kyari, while declaring the earnings in Abuja, said the development happened despite the difficult operating environment.
Kyari said, “Today I am pleased to report that the Board of Directors of NNPC Limited has approved the 2021 audited financial statements, and NNPC has progressed to a new level of performance, moving from a profit of N287b in 2020 to N674b profit after tax in 2021, climbing higher from 134.8% year-over-year profit growth.
Although Nigeria managed to pump an expected quota of crude oil since 2021 (a development that may have impacted the company’s profitability), the price of oil was fair, as the burden of the fuel subsidy, generally registered in the book of the new limited liability company, was placed on the account of the federation.
While the oil company has yet to release the full report, there are indications that shifting the fuel subsidy burden off the company’s book could have helped ongoing profit.
Recall that between January and October 2021, the fuel subsidy would have amounted to N1.03 trillion. The burden went to the account of the federation 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’s financial condition has seen an increase in total assets of N15.86 trillion in 2020 to N16.27 trillion in 2021.”
With the current profit, showing the company progressed in terms of performance by 134.8% year-on-year growth, its total liabilities decreased by 8.3%, from 14.68 trillion naira in 2020 to 13, 46 trillion naira in 2021.
A few days after NNPC acquired OVH Energy from Oando, a move that would aim to increase the national oil company’s portfolio and profits, the Petroleum Industry Act (PIA) changed NNPC from a company to a business-oriented one, with Kyari boasting that it would make it the most profitable business in Africa.
Although not yet listed on any stock exchange, NNPC may have to compete with MTN Group, Safaricom and Dangote Cement, which are currently the top three by market capitalization in Africa.
Kyari said the company would have performed better had the year under review been free of relentless vandalism, crude oil and product theft, among other things.
He added, “We look forward to achieving better performance, supporting our growth aspirations and creating more value for our shareholders as we drive full business operations under NNPC Limited.”