The Nigerian National Petroleum Company (NNPC) Limited on Tuesday declared a profit after tax of N674bn.
The Group Chief Executive Officer of NNPC, Mele Kyari, in Abuja said the NNPC as a corporation grew its profit after tax from N287bn in 2020 to N674bn in 2021.
Announcing the result on Tuesday in Abuja, the NNPC Group Chief Executive Officer, Mele Kyari said, “Today I’m happy to announce that the Board of NNPC has approved 2021 audited financial statements and NNPC has progressed to a new performance level, from N287bn profit in 2020 to N674bn profit after tax in 2021, climbing higher by 134.8% YoY profit growth.”
Kyari said the significant increase in revenue and a less proportionate increase in the cost of sales resulted in a 1,556 percent increase in gross profit.
“Other factors that contributed to the high profitability of the NNPC Group is the outcome of the N173.7 billion arising from reconciliation with Federal Inland Revenue Service (FIRS), a stronger emphasis on performance management, rationalisation of non-essential expenditure and implementation of the transparency and accountability agenda”, he added.
According to NNPC, total assets increased by 2.6 percent from N15.86 trillion in 2020 to N16.27 trillion, while total liabilities decreased by 8.3 percent from N14.68 trillion in 2020 to N13.46 trillion in 2021.
It added that the shareholders’ fund position of the NNPC Group also followed an upward trend as it rose to N2.81 trillion in 2021, as against N1.15 trillion in 2020. This represents a 144 per cent increase at the end of December 2021.
The 2021 financial year made it the fourth consecutive year that the NNPC will be making its Audited Financial Statement public. This was one of the innovations made by Kyari when he took over the helms of affairs of the National Oil Company.
In 2018 when the NNPC first made public its Audited Financial Statement, it made a loss of N803.9bn.
Three components were responsible for the poor and worse performance of the Group ever. They were increase in cost of sales, specifically increase in crude cost; increase in the general and admin expense which almost doubled from N474bn to N894bn; and increase in impairment of receivables and other assets in the yea r by almost 300 per cent.
In 2019 when the NNPC Group Audited Account was released, the loss position had reduced to just N2.3bn.
But with the reforms implemented by the NNPC Boss, the loss position was reversed in the 2020 financial period when the NNPC posted its first profit in 44 years of N287bn.
Since then, the Company has bounced back to reckoning with impressive financial performance of N674bn in 2021.
The rise in profit is mainly occasioned by significant increase in revenue and less proportionate increase in cost of sales resulting to 1,556.9 per cent increase in gross profit.
Other factors that contributed to the high profitability of the NNPC Group is the outcome of the N173.7bn arising from reconciliation with Federal Inland Revenue Service (FIRS), stronger emphasis on performance management, rationalization of non-essential expenditure and implementation of the transparency and accountability agenda.
The impressive profit performance recorded by the NNPC was further bolstered by the positive impact of the N193bn royalty which was written back as a result of the reconciliation with the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
Similarly, the emplacement of aggressive cost control measures by the NNPC management as well as the successes made in the implementation of system-based controls on funds management also boosted profitability.