The devaluation of the naira against the US dollar has had a significant impact on Nigerian businesses, with some firms reporting significant foreign exchange (FX) losses in the first half of 2023.
Data compiled by BusinessDay showed that some major Nigerian firms have reported a cumulative N716.8 billion in FX losses in the second-quarter earnings season.
The firms include MTN Nigeria, Dangote Cement, Dangote Sugar, Nigerian Breweries, Guinness Nigeria, International Breweries, Unilever Nigeria, Sterling Financial Holdings Company, Jaiz Bank, Neimeth, Airtel Africa, and Seplat Energy.
MTN Nigeria
MTN Nigeria recorded an FX loss of N131.45 billion in H1 2023, up from N13.63 billion in the same period of last year.
The firm retained earnings stood at N245.04 billion, down from N343.29 billion in the same period of 2022.
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Nestle Nigeria
Nestle recorded an FX loss of N123.77 billion in H1 2023, up from N2.13 billion in the same period of 2022.
The firm recorded a retained loss of N49.14 billion, compared with retained earnings of N28.37 million a year earlier.
Dangote Cement
Dangote Cement’s net exchange loss on foreign-denominated transactions stood at N113.63 billion in H1 2023, up from N40.66 billion in the same period of 2022.
The cement maker’s retained earnings grew to N804.71 billion from N701.43 billion.
Dangote Sugar
Dangote Sugar’s exchange loss stood at N83.1 billion in H1 2023, up from N4.92 billion in the same period of 2022.
The sugar maker’s retained earnings dipped to N112.64 billion from N124.35 billion.
Nigerian Breweries
Nigerian Breweries reported a net loss on foreign exchange of N70.6 billion in the second quarter of 2022.
The brewery’s retained earnings declined to N32.59 billion in H1 2023 from N99.56 billion in the same period of 2022.
Guinness Nigeria
In the brewery sub-sector, Guinness Nigeria incurred N49 billion in exchange rate loss in its 2023 half-year operations. The exchange rate depreciation led the company to a loss of N18.1 billion, with a loss per share of N8.29 kobo.
The retained earnings stood at N7.88 billion, which indicates an 81 percent decline from N41.44 billion.
International Breweries
International Breweries’ net FX loss stood at N40.67 billion in H1 2023, compared to N4.09 billion in the same period of 2022.
The brewer recorded a retained loss of N81.9 billion as against N58.31 billion a year earlier.
Unilever Nigeria
Unilever Nigeria’s revaluation loss increased to N14.36 billion in the second quarter of 2023 from N1.06 billion in Q1 2023.
The company said the revaluation loss arose from foreign currency-denominated balances related to trade loans.
“Revaluation loss arising from foreign currencies denominated balances in respect of trade loan,” Unilever said in a note.
Unilever’s retained earnings grew 80 percent to N9.2 billion in H1 2023 from N5.11 billion in the same period of 2022.
Sterling Holdings
Sterling Holdings recorded an FX loss of N3.63 billion in H1 2023, compared with a gain of N804 million in the same period of 2022.
The holding company retained earnings stood at N72.99 billion in H1 2023.
Jaiz Bank
Jaiz Bank’s unrealised exchange loss stood at N110.31 million in H1 2023, compared to N69.51 million in the same period of 2022.
Jaiz Bank’s retained earnings stood at N2.28 billion from a retained loss of N739.35 million in the comparable period.
Neimeth
Neimeth’s FX loss stood at N22.82 million in H1 2023, down from N103.15 million in the same period of 2022.
Neimeth recorded a retained loss of N665.16 million, compared with retained earnings of N93.02 million a year earlier.
Airtel Africa
Airtel Africa reported an FX loss of $471 million recorded in finance cost before tax and $317 million after tax, because of the devaluation of the naira. “This impact has been classified as a non-operating exceptional item,” the company said in a note.
Seplat Energy
Seplat Energy said the revaluation of financial assets arising from exchange rate devaluation resulted in a net (non-cash) loss of $33.8 million.
It attributed the decline in its operating profit to a combination of lower oil prices and FX losses due to changes in exchange rates.
The energy firm’s retained earnings dropped to N232.07 billion in Q2 2023 from N241.39 billion in the same period of 2022.
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