NNPC, the country’s national oil company, has released its 2025 annual report for the year ended December 2025, reporting an 18.3% increase in pre-tax profit to N11.31 trillion, compared with N9.56 trillion in 2024.
Profit after tax also grew 32.7% to N7.18 trillion, from N5.41 trillion in the previous year.
The growth in the bottom line, however, came amid a strong decline in revenue. NNPC’s revenue fell 23.4% to N34.52 trillion from N45.08 trillion, meaning the company generated about N10.56 trillion less in sales than it did a year earlier.
The weakness also filtered through to gross profit, which fell 20% to N9.37 trillion from N11.71 trillion.
Ordinarily, a company reporting lower revenue and lower gross profit would be expected to record weaker earnings. But NNPC’s profit moved in the opposite direction.
First, it helps to see why revenue dropped. NNPC’s revenue fell because two of its biggest money-making businesses brought in much less than they did in 2024.
The biggest hit was from petroleum products. NNPC made N2.17 trillion from that business in 2025, down from N9.68 trillion a year earlier. That is a loss of about N7.5 trillion in revenue from just one part of the business. The accounts do not clearly state whether the decline came mainly from lower sales volumes, lower prices, or reduced trading activity.
Also, crude oil brought in less money. Revenue from crude fell to N25.39 trillion from N29.21 trillion, a drop of about N3.8 trillion.
Despite the sharp fall in revenue, NNPC did not see profit collapse with it. Instead, the company benefited from several gains further down the accounts that helped cushion the weakness in its core business.
Aside from the gains from other income, NNPC also spent less on running the business. General and administrative expenses fell to N2.88 trillion from N3.58 trillion, saving the company close to N700 billion.
There was also a major boost from money NNPC had previously assumed it might not fully recover.
So, NNPC had previously prepared for a possible loss on money owed to it, but ended up recovering part of it in 2025. That change alone improved the year-on-year profit position by more than N1 trillion.
Put together, those three movements; higher other income, lower administrative costs, and the impairment reversal more than helped cushion the pressure from lower revenue and weaker gross profit.
Yes, NNPC’s profit grew amid revenue fall, but we also must understand that the company did not end the year with more money in the bank.
So, while NNPC ended the year with less cash on hand, much of the cash it generated was used rather than simply depleted. The company used it to settle accumulated royalty obligations, invest in oil and gas assets, and pay dividends.
In that sense, the lower year-end cash balance partly reflects the fact that NNPC was clearing liabilities and funding future operations, rather than leaving those obligations outstanding.
