Nigerian fast-moving consumer goods firms delayed expansion plans in the first half of the year to manage their cash amid the coronavirus pandemic.
Three consumer goods firms cut heavy investment by 68% to N6.98 billion in the six months to end of June while their cash and near-cash assets rose more than four times to N141 billion in the period.
Data from Unilever, Cadbury and International Breweries show combined capex at a 3-year low. Excluding International Breweries, which has a different accounting year, data going back to 2015 show that capital spending is at its lowest in at least six years.
In the first half of the year net cash of the firms rose to an inflow of N11.13 billion compared to a net outflow of nearly N10 billion last year.
The firms made more money from asset disposal than last year but the figure rose significantly largely as a result of receipts International Breweries recorded in the period.
Notably consumer goods companies so far have seen sales fall off on the back of depressed consumer demand.
The fall out of the Coronavirus pandemic on consumer demand has combined with a weaker exchange rate, low FX liquidity and rising inflation to affect both the sales and operating costs of FMCGs in Nigeria.
