NNPC publishes 2020 audited statements, doubts persist over viability

The Nigerian National Petroleum Corporation (NNPC) has published its audited financial statements as well as its subsidiaries on its website Wednesday night.

This follows the recent announcement by the corporation that it recorded two hundred and eighty seven billion Naira (N287bn) Profit After Tax (PAT) in 2020.

Despite the profit declaration, the auditors, PwC Nigeria, Siao and Muhtari Dangana & Co., in their audit report, maintained that the events recorded “indicate that a material uncertainty exists that may cast significant doubt on the group and corporation’s ability to continue as a going concern.”

This continues a pattern of modified reports by the corporation’s auditors since 2018, a trend that will test the NNPC’s resolve to become a commercial firm.

The auditors reached decided to modify their opinion because during the year, the group’s current liabilities exceeded its current assets by N4.6 trillion,

The corporation said the publication is in compliance with the President’s directive and that the NNPC has fulfilled an important statutory requirement by publishing its Audited Financial Statements today.

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Among the highlights of the 2020 audited report is the Corporation’s group profit which rose from a loss position of N1.7billion in 2019 to a profit of N287bn in 2020, for the first time in 44 years, the corporation said.

Mele Kyari, group managing director of the NNPC had at various times since the President’s declaration of profit, attributed the turnaround to aggressive cost cutting, automation of the system and renegotiation of contracts downwards by about 30 per cent, among other tough measures.

Further highlights of the AFS revealed that while the Corporation’s group financial position increased in total current assets by 18.7 percent compared to that of 2019, its total current liabilities increased by 11.4 percent within the same period.

The group’s working capital remained below the line at N4.56trillion in 2020 as against N4.44trillion in 2019, the AFS further revealed.

Similarly, the Corporation’s group revenue for the 2020 financial year stood at N3.718trillion as against N4.634trillion in 2019, a decrease that could be attributed to the decline in the production and price of crude oil due to the global impact of the Covid-19 pandemic.

This is the third consecutive year that the NNPC is publishing its AFS, having done so for 2018 and 2019.