NNPC profit rises 18.3% to N11.31trn despite 23.4% revenue drop to N34.52trn in 2025

NNPC reported pre-tax profit of N11.31 trillion for 2025, up 18.3% from N9.56 trillion in 2024, while after-tax profit jumped 32.7% to N7.18 trillion from N5.41 trillion. This occurred even as revenue fell 23.4% to N34.52 trillion from N45.08 trillion and gross profit declined 20% to N9.37 trillion from N11.71 trillion. The profit growth stemmed from three factors: other income surged to N8.42 trillion from N3.39 trillion (driven by sundry income up to N7.10 trillion from N2.53 trillion), general/admin expenses fell to N2.88 trillion from N3.58 trillion (saving N700 billion), and NNPC reversed N325.4 billion of 2024 provisions for doubtful debts. However, cash generated from operations rose to N12.81 trillion from N11 trillion, yet year-end cash balance dropped to N6.35 trillion from N10.31 trillion. This happened because NNPC used operational cash to pay N11.56 trillion in royalties (up from N2.83 trillion), spend N9.46 trillion on fixed assets, and pay N4 trillion in dividends. The royalty increase reflected clearing prior-year obligations, not a rate hike—amount owed fell sharply to N1.27 trillion from N9.21 trillion. Thus, while accounting profits improved, the cash outflow shows NNPC was settling liabilities and funding future operations rather than accumulating reserves. Does this profit growth signal genuine operational strength or mainly accounting adjustments, and what should investors make of NNPC's actual financial health given the declining cash position?

SOURCE: https://nairametrics.com/2026/10/01/how-nnpc-avoided-a-loss-in-2025-amid-revenue-decline/