Nine out of ten firms have spent N1.7 trillion on repayment of loans in the nine months of 2024 as foreign exchange losses and rising monetary policy rate take a toll on their balance sheet.
These firms have been faced with economic headwinds such as Naira devaluation which led to a record of foreign exchange losses and rising interest rates – a move by the central bank to combat inflation – which has seen their loan repayment increased during the period.
The Olayemi Cardoso CBN increased benchmark interest rate by a combined 875 basis points in November to 25.7 percent up from 18.75 percent last year to tame rising inflation and shore up the naira that has lost some 70 percent of its value.
Further analysis reveals that only eight firms repaid loans in the nine months of 2023 which amounted to a cumulative N691.8 billion during the period while Dangote Sugar Refinery and Unilever Nigeria did not repay loans in the period under review.
On the flip side, Dangote Cement, BUA Foods, BUA Cement, Nigerian Breweries, Nestle Nigeria, Lafarge Africa, International Breweries, Cadbury Nigeria and Dangote Sugar recorded a cumulative N1.7 trillion in the nine months of 2024 except Unilever Nigeria who did not repay loan.
Lafarge Africa recorded the largest growth in loan repayment which stood at 643 percent, followed by Dangote Cement(487 percent) BUA Foods(385 percent) Nestle Nigeria(236 percent) and International Breweries(165 percent).
Read also: FMCGs’ borrowing costs soar on high interest rates
Firm analysis
Lafarge Africa
Lafarge Africa’s repayment of loans and borrowings declined to N25.5 billion from N3.43 billion in the same period of 2023
Net cash from financing activities stood at a negative N70.1 billion from negative N34.8 billion.
Net cash generated from operating activities stood at positive N40.8 billion from positive N93.5 billion.
Net cash used in investing activities stood at a negative N47.6 billion from negative N19.4 billion.
Dangote Cement
Dangote Cement loans repaid increased to N1 trillion from N170.4 billion
Net cash from financing activities stood at a negative N686.7 billion from a negative N347.9 billion.
Net cash generated from operating activities increased to N532.2 billion from N460.3 billion.
Net cash used in investing activities stood at a negative N109.4 billion from positive N45.5 billion.
BUA Foods
BUA Foods repayment of borrowings increased to N334.4 billion from N68.9 billion.
Net cash from financing activities stood at a negative N455.07 billion from a negative N143.2 billion.
Cash from operating activities grew to N415.5 billion from N223.9 billion.
Net cash used in investing activities stood at a negative N7.9 billion from negative N28.6 billion.
Nestle Nigeria
Nestle Nigeria repayment of borrowings increased to N98.8 billion from N29.4 billion.
Net cash from financing activities stood at a negative N105.8 billion from a positive N7.59 billion.
Cash from operating activities increased to N25.2 billion from N79.7 billion.
Net cash used in investing activities stood at a negative N36.28 billion from negative N26.6 billion.
International Breweries
International Breweries repayment of loans and borrowings declined to N20.5 billion from N7.75 billion.
Net cash from financing activities stood at N131.9 billion from negative N20.8 billion.
Net cash generated from operating activities stood at negative N12.95 billion from positive N9.37 billion.
Net cash used in investing activities stood at a negative N108.5 billion from positive N3.33 billion.
Dangote Sugar Refinery
Dangote Sugar Refinery repayment of loans and borrowings declined to N0.23 billion while none was recorded in the previous year.
Net cash from financing activities stood at a positive N204.2 billion from negative N18.4 billion.
Net cash generated from operating activities stood at negative N267.5 billion from positive N8.53 billion.
Net cash used in investing activities stood at a negative N21.1 billion from negative N5.75 billion.
Unilever Nigeria
Unilever did not repay any loan during the period.
Net cash from financing activities stood at a negative N6.83 billion from negative N0.624 billion.
Net cash generated from operating activities stood at negative N350 million from positive N6.71 billion.
Net cash used in investing activities stood at a negative N0.817 billion from positive N1.4 billion.
BUA Cement
BUA Cement repayment of loans and borrowings declined to N124.5 billion from N129.8 billion.
Net cash from financing activities stood at a negative N89.34 billion from positive N89.66 billion.
Net cash generated from operating activities stood at positive N167.6 billion from positive N147.6 billion.
Net cash used in investing activities stood at a negative N219.8 billion from negative N104.12 billion.
Nigerian Breweries
Nigerian Breweries repayment of loans and borrowings declined to N103.5 billion from N267.2 billion.
Net cash from financing activities stood at N179.8 billion from N165.9 billion.
Net cash generated from operating activities stood at negative N111.1 billion from negative N102.4 billion.
Net cash used in investing activities stood at a negative N62.7 billion from negative N64.6 billion.
Cadbury Nigeria
Cadbury Nigeria’s repayment of loans and borrowings declined to N0.35 billion from N14.9 billion.
Net cash from financing activities stood at a negative N3.49 billion from negative N9.47 billion.
Net cash generated from operating activities stood at positive N14.57 billion from positive N2.79 billion.
Net cash used in investing activities stood at a negative N1.31 billion from negative N1.43 billion.
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