What Made NNPCL’s N674bn After Tax Profit Possible

What Made NNPCL’s N674bn After Tax Profit Possible

Thursday, October 6, 2022 3:56 pm


Nigerian National Petroleum Company Limited (NNPCL), formerly a corporation, on 5 October, announcing that it made N674 billion for the 2021 financial year. It is 134.8 per cent or N387 billion higher than the N287 billion for the corresponding period in 2020.

Mallam Mele Kyari, the Group Chief Executive Officer who made the declaration in Abuja while making public excerpts of the group’s audited financial statement for the year ended December 31, 2021. He stated that the profit was “driven by the company’s activities in the upstream operations as well as in gas and power.”

He also announced that the shareholders’ fund position grew to N2.81 trillion, an increase of 144 per cent, in a speech he titled: “Sustaining Positive Momentum, Progressing to New Levels.”

In his words: “In 2019, we rolled out deliberate policies and initiatives aimed at reducing costs and eliminating losses while adopting technology to entrench Transparency, Accountability, and Performance Excellence (TAPE) across the various functions that support our business operations.

“Since then, we began to see the transformational impact of these policies and initiatives on NNPC’s performance. We have recorded significant improvement in our financial performance over the past three years, turning up the curve, from losses to profits,” Kyari stated.

He recalled that in September 2021, President Muhammadu Buhari approved the publication of the 2020 NNPC Group Audited Financial Statement (AFS) in which NNPC declared a profit after tax of 287 billion for the first time in its 44 years.

Despite the challenging operating environment, Kyari stated that the NNPCL believes that the company has the potential to sustainably deliver better value to its shareholders.

“Today I am happy to announce that the board of the NNPC Limited has approved 2021 audited financial statements, and NNPC has progressed to a new performance level, from N287 billion profit in 2020 to a N674 billion profit after tax in 2021, climbing higher by 134.8 per cent year-on-year profit growth,” he declared.

Kyari also announced that the group’s financial position recorded an increase in total assets from N15.86 trillion in 2020 to N16.27 trillion in 2021, while its total liabilities decreased by 8.3 per cent from N14.68 trillion in 2020 to N13.46 trillion in 2021.

“Our shareholders fund position grew to N2.81 trillion, representing 144 per cent YoY ,“ he said?

The NNPCL helmsman, according to a Thisday report, opined that the performance of the company would have been greater if the operations in the year under review were free from incessant vandalism, crude oil and products theft ,among others.

Kyari stressed that the NNPCL looked forward to achieving greater performance to support its growth aspirations and to create more value for its shareholders as it drives full commercial operations under NNPC Limited.

“Our core business is upstream and gas and power. So the key drivers of this performance is coming from the upstream and the gas and power and the details are available,” he said in response to a question on the units that made the most returns.

On how the profit will be shared, going forward, Kyari noted that the decision will be made by the shareholders and their representatives after a meeting.

“You make profit and the dividend is always governed by dividend policies of every company. The shareholders in this company is the country, the 200 million Nigerians represented by the Ministry of Petroleum incorporated and the Ministry of Finance incorporated in the case of the NNPC limited, but for the corporation, it is a different consideration.

“The federation now decides what to do with this. And currently as you might be aware, you know there’s a huge difference between the obligations of the NNPC and that of the corporation, so we’re sorting this out to be the decision of the shareholders whether to return part of it or all of it. So I cannot give you any number because that decision has not been made,” he posited.

The chief executive who lamented the incessant attacks on the NNPCL infrastructure, said that production had been ramped up to around 1.2 million barrels per day.

He noted that the NNPCL has a proven capacity to meet its production targets , explaining that production without any extraneous intervention had peaked at 2.4 9 million barrels per day a few years ago.

“That means we have capacity without doing anything extra to produce up to 2.49 million barrels per day,” he assured.

But with the coming of covid-19 and the issues around the acts of vandalism, the GCEO said there had been a gradual decline in production up to the point of 1.2 million barrels per day currently.

Kyari, who took questions on when the issue of sabotage of NNPCL pipelines is expected to stop, explained that the 700, 000 barrels per day losses weren’t necessarily stolen , but that most was production foregone due to vandalism of its assets.

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