Victor Eromosele, Chairman and CEO of M.E Consulting Ltd has said that, Nigeria’s national oil company, NNPC, has shown remarkable financial performance and operational efficiency in its 2024 Profit at a Tax results, stating that the company’s performance demonstrates strong margins, healthy asset growth, and the capacity to meet financial obligations, signaling a positive trajectory compared to previous years and some international peers.
Speaking In an interview with ARISE NEWS on Tuesday, Eromosele, who previously served as a CFO, explained that he analysed NNPC’s numbers in dollar terms to account for the fluctuations of the naira and to allow meaningful comparison with global energy companies where he examined top-line and bottom-line performance, profit margins, asset growth, and return on capital employed to assess the sustainability and efficiency of the company’s operations.
“The first thing I did in terms of analysis was actually trying to convert these numbers to dollars. The reason why I’m converting these numbers to dollars is the very fact that we all know what has happened to Naira in the periods we’re looking at. And if you look at it in dollars, you’ll find that the top line, instead of that $45 trillion, is actually $31.1 billion. The bottom line, instead of $5.4 trillion, is actually $3.7 billion,” Eromosele said.
He further compared NNPC’s performance with international energy firms such as Chevron and Italy’s E&I, noting the company’s remarkable efficiency despite its smaller scale. ““Clearly, you’ll see that NNPC did better. So, from that perspective of efficiency, financial efficiency, we will say that NNPC has superior profit margins,” he said, citing an 11.8% margin for NNPC compared to 6% for E&I and 9% for Chevron.”
Eromosele highlighted other positive indicators, including NNPC’s asset growth and return on capital employed. “Everybody said, ‘oh, sweat the assets. How have they grown?’ 56% growth in total assets. What about the other thing, investors? What was the return on capital employed? And the number is 28%. And that is quite healthy, from 23% the previous year. So, we can clearly say, looking at the superficial parameters, NNPC actually did well.”
While acknowledging that some analysts attribute these gains to forex gains and subsidy removals, he argued that NNPC has demonstrated genuine operational progress. “One thing we can say is that the plane is no longer on the runway. The plane has taken off. If you listen to Bibi Ojolari, the group CEO, I quote him, it talks about positive momentum. You think about planes, you think about speed, and then you think about altitude, and then vision, make sure you land at the right airport. So, one thing we can say is that NNPC, when it was a corporation, it was on the runway. Now, definitely, it’s no longer on the runway, it’s in the air flying.”
On cash costs and NNPC’s capacity to meet its payables, Eromosele said the company is in a strong position. “From what I can see, they have a capacity to meet its payables. The first thing you look at is to say, hey, between your current asset and your current liability, which is more? In the case of NNPC, the current assets by far exceed. Actually, I compared that to 2023. In 2023, they were nearly at par. In 2024, the assets have actually grown higher, which means that it’s actually in a very good position to meet all its debt obligations based on the audited financials.”
He cautioned, however, that improvements in financial reporting timelines are still needed. “The only problem I have personally is that financials, world-class financials, should be published before the half-year, in other words, between March and June. Here we are in what month? December, almost November. So clearly, but I find out, hey, what happened? Okay, there was a change in systems, they were installing new accounting systems and so on. But the fact that it’s published at all in the same year, it’s an improvement. What I can say, it is not yet uhuru.”
Eromosele’s analysis underscores that NNPC has made measurable progress toward becoming a globally competitive energy company. “We want to celebrate. But if I understood that, you say, oh, you came 10th. I say, no, somebody came first. You can see that relative to internationals, that is where the benchmark is. We’ve been able to discount out the forex, and that’s why we’re looking at dollars. If you did a little comparison, you actually see that even in dollar terms, there actually was a drop in 2024, in 2023, but it was not peculiar to NNPC.”
He concluded that while challenges remain, “NNPC is flying higher than ever before, demonstrating efficiency, financial discipline, and operational momentum.”
Erizia Rubyjeana
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