The NNPC Group closed its operations last November with the biggest monthly deficit since August 2017.
The group’s oil and gas report for November, 2017 shows an upsurge in monthly deficits from N0.41 billion in October — the lowest figure in 13 months — to N6.79 billion in November.
The corporation has not recorded any monthly surplus over the 13-month period shown in its report.
Weakness in revenue performance across a number of subsidiaries and units accounted for the increased deficit. NPDC’s revenue declined slightly to N85.13 billion in November while IDSL suffered a revenue drop of 61% to N523 million.
NETCO lost 35% of the preceding month’s revenue while the combined revenue of refineries fell by close to 70% in November to a little over N13 billion.
PPMC/NPSC recorded a drop of 28% in revenue in November while earnings by head office and ventures dropped by 37% and 55% respectively. Expenses failed to decline as rapidly as revenues, leading to the increase in deficits.
The upsurge in deficit spending led to an accelerated increase of about 10% in the overall deficit figure from N68.84 billion in October to N75.63 billion in November. The increase was virtually flat in October at 0.6%, raising hopes for a possible shift to a monthly surplus, as monthly deficits declined sharply for the third month running.
Total revenue grew by 8.9% to N3,321 billion between October and November, a slowdown from 13.1% increase in October. The group’s total expenses grew by 8.9% to N3,396.62 billion, also slowing down from 12.8% growth in October.
The corporation’s revenue target of a little over N4,045 billion at the end of November was undershot by over N724 billion, increasing the margin from N627 billion at the end of October. NPDC, the upstream subsidiary achieved a reasonable growth of 17% in revenue to N586.77 billion in November from the closing figure in October though a slowdown from over 21% growth in October.
The subsidiary was short of revenue budget target of over N714 billion for the end of November by about N200 billion. The revenue shortfall has however continued to decline from N228.4 billion in September.
Nigerian Gas Processing and Transportation Company [NGPTC], maintained its previous record of growing revenue ahead of costs. The company improved revenue by close to 11% to N250.78 billion in November while expenses grew by 9.7% to N185.33 billion over the review period. It is however still bursting its expenditure budget though its surplus continues to grow from N57.23 billion in October to 65.45 billion in November.
Refineries showed the worst performance in the year in November, as Port Harcourt refinery – the life wire of the group, shut down for maintenance during the review period. Expenses grew further ahead of revenues, as deficits grew in Kaduna and Warri refineries while the surplus figure from Port Harcourt refinery declined during the period. The overall deficit figure for the refineries continued to multiply from N2.84 billion in September to N10.60 billion in October and further to N21.75 billion.
NNPC’s retail operations reported a total revenue of N1,944.05 billion at the end of November, an increase of 8%. Compared to a budgeted revenue figure of N2,121.78 billion, its deviation from budget continues to widen from N82 billion in September to N130.30 billion in October and further to N177.63 billion at the end of November. Against a planned budget deficit of N27.63 billion for PPMC/NPSC, the actual figure was in excess of N91 billion at the end of November.
Only small fractions of revenues expected from corporate headquarters [CHQ] and ventures were realised at the end of November. Expenses are far in excess of revenue though the figures remain well below budget. The deficit from the sub group grew further from N119.41 billion at the end of October to N131.55 billion at the end of November.
The overall actual deficit of N75.63 billion in November is against an anticipated budget surplus of over N551 billion for the period. Expenditure lines remained generally ahead of budget provisions in most of the subsidiaries and units.
NPDC overshot its expenditure budget by over N231 billion at the end of November, rising from N177 billion at the end of October. NGPTC over spent its budget by N13.62 billion. Kaduna refinery also exceeded its budget expenditure line by over N19 billion at the end of November. Port Harcourt refinery maintained its expenses both below its revenue and below its budget target at the end of November.
Retail unit maintained its below budget spending record, raising the margin of cost saving from N82.51 billion in October to over N91 billion in November. This continued to compensate for deficit spending by PPMC/NPSC, leaving the deficit for the sub group only slightly increased at N91.47 billion at the end of November.