NewsNNPCL Declares N674bn Profit After Tax For 2021

NNPCL Declares N674bn Profit After Tax For 2021

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October 4, (THEWILL) – The Nigerian National Petroleum Company Ltd (NNPCL), has declared a profit after tax (PAT) of N674.1billion for the year ended 2021.

Mele Kyari, group chief executive officer (GCEO), NNPC Limited, made this known in a briefing on Tuesday.

The N674bn profit posted by the NNPC Group in the 2021 financial period represents an increase of N387bn or 134.8 percent when compared to the N287bn recorded in 2020.

Glo

Announcing the result on Tuesday in Abuja, 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.”

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 helm 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 increased in cost of sales, specifically increase in crude cost; increase the general and admin expense which almost doubled from N474bn to N894bn; and an increase in impairment of receivables and other assets in the year 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 an impressive financial performance of N674bn in 2021.

The rise in profit is mainly occasioned by a significant increase in revenue and a less proportionate increase in the cost of sales resulting in a 1,556.9 percent increase in gross profit.

Other factors that contributed to the high profitability of the NNPC Group are the outcome of the N173.7bn arising from reconciliation with the Federal Inland Revenue Service (FIRS), a stronger emphasis on performance management, rationalisation 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.

Further analysis of the NNPC Group Audited Financial Statement showed that revenue rose by 72.6 percent to N6.42trn in 2021 as against N3.72trn in 2020.

The increase in revenue is attributable to improvement in the production and price of crude oil during the period under review.

The Audited Financial Statement further revealed an increase of 2.6 percent in total assets from N15.86trn in 2020 to N16.27trn in 2021.

Through efficient management of the affairs of the company, the Audited Financial Statement also showed that total liabilities decreased by 8.3 percent from N14.68trn in 2020 to N13.46trn in 2021.

In line with the growth trajectory of the current management, the shareholders’ fund position of the NNPC Group also followed an upward trend as it rose to N2.81trn in 2021 as against N1.15trn in 2020. This represents a 144 percent increase in shareholders’ funds as of December 31, 2021.

The cost of sales also rose by 46.3 percent from N3.65trn in 2020 to N5.34trn in 2021. The increase in the cost of sales is attributable mainly to the increase in crude oil production.

The selling and distribution expenses also increased from N36bn in 2020 to N52bn in 2021. This increase is in line with the rise in revenue from petroleum product costs during the year under review.

The net impairment loss on financial assets dropped to N65bn in 2021 as against the impairment reversal of N713bn in 2020.

The positive result is coming as global economies continue to struggle with the recessionary forces and weak economic outlook.

The NNPC’s Group Account was audited by PriceWaterhouseCoopers, SIAO, and Muntari Dangana Accounting Firms.

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