NNPC Posts N7.2trn Profit Despite Revenue Drop
By Aboki Forex —
NNPC made a profit of N7.2 trillion despite a drop in revenue, with Group Chief Executive Officer Bayo Ojulari saying the performance reflected “a new culture of discipline across the company.”
The profit came even as revenue came under pressure. One of the less visible factors behind the improved bottom line was tighter control of expenses, the company said. Under a new framework, NNPC cannot simply depend on government funding when customers fail to pay for crude oil or gas supplied to them.
Cost control and people
Management believes financial discipline alone cannot sustain the transformation. The company is also pushing changes in its workforce and leadership. More than 1,000 young professionals joined NNPC during the year. They went through a one-year internship and training programme before being deployed across different parts of the organisation.
Women now make up more than 23 per cent of NNPC’s leadership, according to the company.
The staffing changes and expense controls are part of a wider effort to strengthen the company’s finances. NNPC says the N7.2 trillion profit has provided evidence that it can improve its bottom line even when revenue is under pressure.
Partners, gas and IPO
NNPC initially considered more than 50 potential partners before reducing the number to about 20. The shortlisted companies subsequently carried out detailed inspections of the facilities, involving more than 30 senior technical experts.
Gas production is expected to increase to 10 billion standard cubic feet per day by 2027 and 20 billion standard cubic feet per day by 2030. NNPC hopes increased gas availability will support power generation, manufacturing, fertiliser production, petrochemicals and other industries.
However, no date has been fixed for an initial public offering.
What it means for Nigerian business
If the gas targets are met, the added supply could feed power generation, manufacturing, fertiliser production and petrochemicals, sectors that depend on reliable energy and feedstock. For now, the N7.2 trillion profit shows NNPC can grow earnings while revenue is under pressure.
Tamuno, an investment analyst, writes from Port Harcourt.