NNPC profit rises 18.3% in 2025 despite N10.56tn revenue fall
NNPC has released its annual report for the year ended December 2025, showing pre-tax profit up 18.3 per cent to N11.31 trillion, from N9.56 trillion in 2024.
Profit after tax increased 32.7 per cent to N7.18 trillion, compared with N5.41 trillion a year earlier.
The improved earnings came even as revenue shrank sharply. Sales fell 23.4 per cent to N34.52 trillion from N45.08 trillion, a decline of about N10.56 trillion.
Gross profit also weakened, sliding 20 per cent to N9.37 trillion from N11.71 trillion.
A company reporting lower revenue and lower gross profit would normally post weaker earnings. NNPC's profit, however, went the other way.
Why revenue fell
The decline came largely from two of NNPC's biggest revenue earners, both of which brought in much less than in 2024.
Petroleum products took the hardest knock. That business generated N2.17 trillion in 2025, down from N9.68 trillion a year earlier — a fall of about N7.5 trillion from that segment alone. The accounts do not make clear whether the drop was driven mainly by lower sales volumes, lower prices or reduced trading activity.
Crude oil also earned less. Revenue from crude slipped to N25.39 trillion from N29.21 trillion, a decline of about N3.8 trillion.
What propped up profit
NNPC's profit did not collapse alongside revenue. Gains further down the accounts softened the effect of the weaker core business.
Other income provided the largest cushion, climbing to N8.42 trillion from N3.39 trillion.
Sundry income accounted for most of that rise, jumping to N7.10 trillion from N2.53 trillion.
According to NNPC, this included earnings from pipeline operations, crude processing fees, miscellaneous receipts from joint-venture operators, and a writeback tied to the Amenam-Kpono stock overlift claim.
Crude-stock valuation and management fees also produced higher gains.
The company also spent less on operations. General and administrative expenses declined to N2.88 trillion from N3.58 trillion, saving close to N700 billion.
The largest saving came from professional and consultancy fees, which fell by more than N600 billion.
Security costs, fines and penalties, and repairs and maintenance also dropped significantly.
Those cuts outweighed rises in staff costs and depreciation, bringing administrative expenses down overall.
A further lift came from money NNPC had previously expected might not be fully recovered.
In 2024, the company set aside about N753.6 billion on the assumption that some amounts owed to it might not be collected, which weighed on profit that year.
By 2025, the position had improved. Instead of making further provisions, NNPC reversed about N325.4 billion of the earlier ones.
In other words, NNPC had provided for a possible loss on money owed to it, then recovered part of it in 2025. That reversal alone improved the year-on-year profit by more than N1 trillion.
Together, the higher other income, lower administrative costs and the impairment reversal more than offset the pressure from weaker revenue and gross profit.
Profit did not translate into cash
Even with profit growing, NNPC did not finish the year with more money in the bank.
Cash generated from operations rose to N12.81 trillion in 2025 from N11 trillion a year earlier. Yet the year-end cash balance fell to about N6.35 trillion from N10.31 trillion.
The reason is that much of the cash was spent during the year. Royalty payments came to about N11.56 trillion, oil, gas and other fixed assets absorbed roughly N9.46 trillion, and dividends accounted for around N4 trillion.
The royalty figure rose from N2.83 trillion in 2024. That jump did not reflect a sudden fourfold increase in the royalty charge; the accounts show NNPC was also settling royalty obligations accumulated from earlier years.
As a result, outstanding royalties fell sharply to N1.27 trillion from N9.21 trillion.
So while NNPC held less cash at year-end, much of what it generated was put to use rather than simply draining away. The funds went towards clearing accumulated royalty obligations, investing in oil and gas assets and paying dividends.
In that light, the lower closing cash balance partly reflects NNPC settling liabilities and funding future operations instead of leaving those obligations outstanding.
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