The Audited Financial Statement (AFS) for year 2020, for the Nigerian National Petroleum Corporation (NNPC), shows that the the corporation’s liabilities still outstrip its assets.
This is the third time since it was established 44 years ago, the company would be making its audited report public.
This is coming even as President Muhammadu Buhari in August announced a profit after tax (PAT) of N287 billion for the NNPC for the financial year ended 2020 and had directed the corporation to ensure prompt publication of its AFS in line with the requirements of the law.
With the development, the corporation has now joined other state-owned global oil concerns that publish the details of their operations, to among others, boost investors’ confidence and enhance business transparency.
NNPC’s independent auditors, namely PriceWaterhouse Coopers (PwC), SIAO Partners and Muhtari Dangana & Co, drew attention to note 42 of the consolidated and separate financial statements, which indicates that the group recorded a net profit of N287.2 billion (Corporation: N235.3 billion) during the year ended 31 December 2020 and, as at that date, the group’s current liabilities exceeded its current assets by N4.6 trillion (Corporation: N729.1 billion).
“As stated in note 42, these events or conditions, along with other matters as set forth in note 42, indicate that a material uncertainty exists that may cast significant doubt on the group and corporation’s ability to continue as a going concern. Our opinion is not modified in respect of this matter,” they noted.
The financial statement showed that aside the already announced PAT, from a loss position of N1.7 billion in 2019, to N287 billion in 2020, NNPC’s total current assets increased by 18.7 per cent compared with that of 2019, while its total current liabilities increased by 11.4 per cent within the same period.
The group’s working capital remained below the line at N4.56 trillion in 2020, as against N4.44 trillion in 2019, while the corporation’s group revenue for the 2020 financial year stood at N3.718 trillion as against N4.634 trillion in 2019.
According to the corporation, the decrease in the group’s revenue could be attributed to the decline in production and price of crude oil due to global impact of Covid-19.
The auditors stressed that though the NNPC announced a profit of N287 billion, but the large discrepancy between assets and liabilities cast some uncertainty on the corporation’s operations.
The newly released AFS also indicated that the NNPC recorded a profit before tax of N719 billion in 2020, compared with N93 billion loss in 2019, and a total comprehensive income of N655 billion compared to a loss of N20.1 billion last year.
The financial statement was signed by the Group Managing Director of the corporation and the Chief Financial Officer, Mallam Mele Kyari and Mr Umar Ajiya respectively and was dated September 3.
