…. Targets 2 million barrels/day Production
NNPC Limited has achieved a remarkable milestone by reporting a record-breaking net profit of N3.3 trillion for the 2023 financial year, marking a substantial 27.6% increase from the N2.58 trillion in the corresponding period of 2022.
This would be the highest profits ever declared in NNPC Limited’s history, and since it transitioned to a profit-making entity in 2020 after the enactment of the PIA into law. This monumental achievement was unveiled at the company’s Annual General Meeting, emphasising NNPC Limited’s exceptional financial success and strategic growth, which significantly contributes to the expansion of Nigeria’s energy sector. Mele Kyari, NNPC’s GCEO, confidently remarked that NNPC’s sustained profitability reflects a corporation that is not merely surviving but thriving, demonstrating robust outcomes that underscore NNPCL’s operational efficiency and strategic foresight.
In his comments on the results, Umar Ajiya Isa, Executive Vice President and Chief Financial Officer of NNPCL, emphasised NNPCL’s exceptional performance in the 2023 Financial Year. According to him, NNPC Limited achieved a remarkable ₦23.99 trillion in revenue, showcasing its robust market position and operational efficiency. With a gross profit of ₦7.04 trillion and an operating profit of ₦4.34 trillion, NNPCL achieved a net profit of ₦3.3 trillion at the end of 2023. These impressive results signify a solid net profit margin of 14% and an operating profit margin of 18%, demonstrating the company’s adeptness at converting revenue into substantial profits. In addition, NNPC Limited’s 2023 financial results showcased a 12% return on equity (ROE) as of FY2023 and maintained a current ratio of 1:1, reflecting a balanced approach to asset and liability management. Notably, the company’s debt-to-assets ratio stood at a mere 1.8%, highlighting prudent financial management and a robust balance sheet.
The year 2023 also saw NNPC Limited doubling its noncurrent assets, building on a remarkable 141% growth from the previous year. This asset expansion was primarily driven by strategic investments and the transfer of joint venture (JV) assets in alignment with the Petroleum Industry Act (PIA). The company’s total assets now stand at ₦246.82 trillion, reinforcing its status as a formidable player in the global energy sector. In its results, NNPCL declared a final dividend of ₦2.101 trillion, following an interim dividend of ₦536.64 billion. This brought the dividend payout ratio to an impressive 80%, reflecting the company’s strong profitability and confidence in its continued success. With earnings per share (EPS) of ₦16.49 and a dividend per share (DPS) of ₦11.11, shareholders have reaped significant returns from their investment in NNPC Limited.
NNPCL’s strategic projects in 2023 further underscore its role as a key player in enhancing Nigeria’s energy infrastructure. Notably, the $1 billion allocated for rehabilitating the Port Harcourt Refining Company (PHRC) aimed at boosting refining capacity by 210,000 barrels per day, significantly enhancing the nation’s refining capabilities. Additionally, NNPC Limited’s acquisition of a stake in the Dangote Refinery, which has now been fully repaid, strengthens its strategic position and supports Nigeria’s push towards energy independence. The company also secured substantial foreign exchange stabilisation loans, including a $3.3 billion loan that benefits the Federation, tied to a pledge of 90,000 barrels daily.
Amidst challenging economic conditions, NNPC Limited’s performance in 2023 demonstrates its operational excellence and strategic foresight. The company’s revenue growth, asset expansion, and shareholder returns affirm its position as a leader in Nigeria and globally. As NNPC Limited continues to implement its long-term strategy, the future looks promising, with strong confidence in its ability to maintain and expand upon its achievements. On NNPCL’s future outlook, Umar Ajiya, NNPCL’s CFO, further stated that NNPCL has set its sight on achieving oil production of 2,000,000barrels/day and is currently working with the relevant security stakeholders to curb oil theft and pipeline vandalism in line with President Bola Tinubu’s Directives. NNPCL’s unwavering focus on sustainability, profitability, and energy security not only positions NNPC Limited as an industry leader but also lays the groundwork for Nigeria’s economic future, delivering tangible benefits to the nation and its citizens.