By Seun Ibiyemi
The Nigerian National Petroleum Company Limited (NNPC Ltd) has delivered a landmark financial performance for the 2024 fiscal year, posting record-breaking revenue and profit figures.
The results underscore the impact of higher crude output, sector-wide reforms under the Petroleum Industry Act (PIA), and the strategic emergence of domestic refining capacity, most notably the Dangote Petroleum Refinery.
However, this growth narrative is juxtaposed against a backdrop of rising finance costs, increased leverage, and the evolving operational complexities of a deregulated sector.
Financial performance
NNPC’s top-line performance was nothing short of historic. Total revenue surged by 87.89% to close at ₦45.08 trillion, primarily driven by crude oil sales, which more than doubled to ₦29.21 trillion. The company also recorded double-digit growth across its petroleum products, natural gas, power, and service subsidiaries.
Operational profitability followed suit:
•Gross Profit: Rose by 66.41% to ₦11.71 trillion.
•EBITDA: Nearly doubled to ₦14.80 trillion, with margins improving to 32.84%, reflecting strong operational resilience.
•Profit Before Tax (PBT): Climbed 59.61% to ₦9.56 trillion.
•Profit After Tax (PAT): Grew by 64.20% to ₦5.41 trillion.
However, the cost of this growth was evident. Finance costs skyrocketed by nearly 300% to ₦1.75 trillion, pressuring net margins which dipped to 12.01%.
Balance sheet
The company’s asset base expanded significantly, growing 54.87% to ₦162.19 trillion, bolstered by higher inventories, receivables, and aggressive capital activity.
Equity rose by 36.39% to ₦38.91 trillion, driven by a 54.17% growth in retained earnings. Meanwhile, the debt-to-equity ratio rose to 3.17x, highlighting a deeper reliance on debt financing to fund operations and investments.
Liquidity also showed modest improvement, with current and acid-test ratios standing at 0.88x and 0.82x, respectively.
Cash flow & valuation
NNPC demonstrated robust cash generation, pulling in ₦10.82 trillion from operating activities, a significant rise from FY 2023. Despite higher capital expenditure, the company maintained a positive free cash flow of ₦3.20 trillion.
Cash buffers were reinforced by financing inflows of ₦638.03 billion, leaving the company with a solid cash position of ₦10.31 trillion.
Market performance
Domestically, the energy landscape is shifting. Crude production climbed to between 1.43 and 1.79 million barrels per day, supported by sustained improvements in security and infrastructure.
The commissioning of the Dangote Refinery has begun to reshape regional product flows, reducing import dependence and intensifying downstream competition.
Simultaneously, NNPC’s power-related revenues surged, signaling its deepening footprint in the gas-to-power value chain.
Management commentary
NNPC management attributed the stellar results to the PIA-driven reforms, operational efficiencies, and a renewed governance structure.
Speaking on the results, the Group Chief Executive Officer of NNPC Ltd, Mr. Bayo Ojulari, stated that the audited financial statement is a testament to the company’s transition into a commercially focused entity.
“Our engagement today is intentional; it reflects our evolving focus on becoming a truly limited liability company, a commercially driven entity as intended in the PIA,” Ojulari said. “The 2024 financial results embody discipline, progress, and the dedication of our teams nationwide.”
Ojulari highlighted that the performance was propelled by enhanced operational efficiency, the positive impact of downstream market reforms, and unwavering cost discipline.
“Financially, we have never been stronger or better positioned for tomorrow. Strategically, this financial capacity powers our ambitious national initiatives,” he noted.
He further outlined the company’s aggressive infrastructure push: “We are vigorously advancing key gas projects such as the Ajaokuta-Kaduna-Kano (AKK) pipeline and the Obiafu-Obrikom-Oben (OB3) pipelines to unlock a gas-powered economy. We are also reviewing the technical and commercial viability of our refineries to strengthen domestic energy security, while pursuing a $60 billion investment pipeline to expand oil and gas output.”
The GCEO reaffirmed NNPC’s targets of raising crude production to 3 million barrels per day by 2030 and growing gas production to 12 billion cubic feet per day.
Outlook
NNPC sits at a critical inflection point. The combination of higher national output, commercial transformation under the PIA, and new domestic refining capacity offers substantial upside.
However, these developments bring complexity. Sustaining this momentum will require the company to navigate market competition, manage rising finance costs, and address its leverage ratios.
The company’s medium-term success will hinge on disciplined execution, working-capital efficiency, and its ability to adapt to the shifting dynamics of the global and Nigerian energy landscapes.