Analysis from Nigerian Exchange Group (NGX) reports reveals that Dangote Group, Nestle and MTN Nigeria alongside four of Nigeria’s most capitalized companies have lost N1.7tn.
The financial statements published on the website of the Nigerian Exchange Group (NGX) has revealed.
The listed firms incurred significant losses in the 2023 financial year, largely due to forex-related losses.
Furthermore, Nigeria’s largest conglomerate, Dangote Industries, in its 2023 financial statement said it incurred N164bn FX loss in 2023. The conglomerate said the loss was primarily due to its operations in other countries.
Another manufacturing giant, BUA, also reported a forex loss of N69.9bn. This represented a significant increase from the N5.5bn it recorded in 2022.
The firm said,
“The Company is exposed to foreign exchange risk arising from future commercial transactions and some recognized assets and liabilities to the US dollar and euro.
It said “Management minimizes the effect of the currency exposure by buying foreign currencies when rates are relatively low and using them to settle bills when due. The company is primarily exposed to the US dollar and Euro.”
Meanwhile, Nigerian Breweries, according to the NGX report, in its audited 2023 financial report, recorded a loss of N153bn, a sharp contrast to the N26.3bn recorded in 2022. This means that the company’s loss increased by 83 percent in 12 months.
The forex loss had a huge impact on the firm’s overall performance in the 2023 financial year, driving its net loss to N106bn.
The FMCG giant, Nestle Nigeria, was not also spared, in its 2023 financial; the company said due to the depreciation of the naira, it incurred forex-related losses to the tune of N195.bn.
The firm said its profit-after-tax was negatively impacted by the depreciation of the naira as its operating cost jumped by 41.2 percent to N122.7bn.
Another big player in the FMCG sector, Cadbury Nigeria, in its 2023 financial statement said it incurred a loss of N36.93bn due to exchange rate differences in 2023. The currency-related challenge was a major theme that negatively impacted the company’s financials in 2023.
In response to the negative equity of N15.08bn recorded in 2023, reflecting a 213 percent decrease from the previous year, Cadbury Nigeria has proposed a strategic move to address its financial structure.
The company plans to convert its outstanding $7.7m loan payable to its major shareholder, Cadbury Schweppes Overseas Limited, into equity.
However, in the telecommunications sector, MTN Nigeria recorded a staggering forex loss amounting to N740.4bn, NGX reported.
This represented an 804 percent increase compared to the N81.8bn recorded in 2022. While in the banking industry, FBN Holdings took a significant forex loss valued at more than N350bn in the 2023 financial year.
The HoldCo, in its unaudited financial report, said N253.7bn net forex losses were recorded in the final quarter alone.
It blamed the losses on a policy shift implemented in June 2023 — the liberalization of the foreign exchange market. Cumulatively, the seven firms lost a total of N1.7tn to the depreciation of the naira.
