NNPC Records N2.5trn Net Profit over a period of 16 months, Marking a Significant Milestone

Nigerian National Petroleum Company Limited recorded a profit after tax of N2.5 trillion for the 16 months to December 2022, its latest audited financials show.

The new report breaks away from the previous tradition that set the annual financial year end of the oil firm at around August, with subsequent financials likely to follow a 12-month cycle ending on 31 December like most companies.

Revenue for the period stood at N8.8 trillion, more than half of that supplied by proceeds from refined petroleum product sales.

Yet, the contribution of that income source would have been bigger if not for the depleting effect of PMS Under Recovery, which accounts for the cash used for subsidising petrol, on revenue.

The company spent N2.4 trillion during the period on fuel subsidies, which President Bola Tinubu abolished at his inauguration last May because it had been a big drain on the government’s purse.

Fuel subsidies were the single biggest expense incurred by NNPC during the period, alone accounting for 35.8 per cent of the cost of sales.

Under general and administrative expenses which totalled N1.7 trillion, the cost described as “other expenses” remains a grey area needing further clarification from the company, given its significance as the largest cost in this section, gulping as much as N496.4 billion.

Profit before tax for the period stood at N1.8 trillion.

The group realised N2.2 trillion from exchange differences in translation of foreign operations, made possible by increased value from earnings in foreign currencies after conversion to naira.

NNPC issued its first audited accounts for the first time in 43 years in 2020 and transitioned into a limited liability company two years later as part of efforts to free the monolithic enterprise from government control.

Its push to become a publicly traded company has stalled after missing the target to launch its initial public offering last year.

Independent auditor PwC did not raise any key audit issue in its report attached to the document.