Foreign exchange-related losses of N627.7 billion in the first quarter of the year were reported by eight manufacturers, including Dangote, BUA, and Lafarge. An analysis of the financial statements of these firms, published on the Nigerian Exchange Limited, revealed these losses.
The firms mentioned on the exchange include BUA Foods, Lafarge Africa Plc, Nestle Nigeria, BUA Cement, International Breweries, Dangote Sugar, Nigerian Breweries, and Dangote Cement.The naira has experienced significant depreciation since the beginning of the year, hitting a peak in February when it reached N1,900 against the dollar in the parallel market.
This devaluation has impacted businesses negatively, forcing firms with forex-denominated obligations to revalue them due to the naira’s decline.For example, Lafarge Africa Plc saw its forex losses increase to N21.8 billion from a gain of N320 million in the same period the previous year.
This resulted in a substantial decrease in profits for the company.Dangote Cement and BUA Cement also faced forex losses, impacting their financial performance. The challenging business environment due to inflation and forex volatility led to an increase in costs for these manufacturers.Nestle Nigeria and Dangote Sugar in the food and beverage sector, as well as International Breweries and Nigerian Breweries in the brewing industry, all recorded significant forex losses in the first quarter of the year, affecting their financial results.Despite some manufacturers growing their revenues, the overall impact of forex losses and market challenges has been substantial across various sectors. The continuous depreciation of the naira has posed significant challenges to businesses, leading to losses and affecting profitability ratios negatively.From: Amadi Vincent Uzoma
