Top 5 publicly-listed Nigerian companies suffer N1.7 trillion FX losses in 2024

• The top five publicly-listed Nigerian companies suffered N1.7 trillion foreign exchange losses in 2024
• The figure surpassed the losses recorded by the companies in 2023
• The losses were due to naira depreciation, frequent policy changes, among other macroeconomic factors

The top five publicly listed companies in Nigeria have reported a combined foreign exchange (FX) loss of N1.7 trillion in their full-year 2024 financial results.

The companies are MTN Nigeria, Dangote Cement, Nestle, Nigerian Breweries, and BUA Foods.

An analysis of their financial results in the past year showed the amount of FX lost surpassed the recorded losses in 2023.

MTN Nigeria recorded FX loss of about N1.03 trillion in 2024, a 23.7 per cent increase compared to the N834.28 billion recorded in 2023.

This led to N550.33 billion loss recorded in 2024 from N177.89 billion seen in 2023 and a loss after tax of N400.44 billion in 2024.

The telecommunications company, however, said it reduced its outstanding dollar obligations by 95 per cent to approximately $20.8 million.

Dangote Cement declared N249.3 billion FX loss in 2024, a 52 per cent increase from the N164.08 billion recorded in 2023.

Nestle Nigeria reported an FX loss of N290.7 billion, which led to N221.6 billion loss before tax in 2024, up from N104.03 billion recorded in 2023.

For Nigerian Breweries, reported FX loss stood at N157.59 billion in 2024, leading to loss before tax of N182.92 billion in 2024 from N145.22 billion in 2023.

BUA Foods saw an FX loss of N188.7 billion in full-year 2024

Factors responsible for FX losses

According to a report by Financial Derivatives Company (FDC) Limited, the depreciation of the naira, which weakened by an average of 50 per cent between 2023 and 2024, was a major factor responsible for the losses.

FDC Limited added that apart from the volatility of the foreign exchange market, other additional challenges, such as frequent policy changes and excessive taxation, impacted earnings across industries.

It also stated that increased interest rates, which reached 27.50 per cent in 2024, have made debt servicing and financing expansion projects more expensive, limiting business growth.

In addition, the rising cost of raw materials, energy, and labour has also reduced profit margins, further weakening financial performance.

The FDC report stressed that heightened inflation and a weaker naira have eroded purchasing power, leading to lower demand for goods and services.

“Companies failing to embrace digital transformation are losing their competitive edge in an increasingly tech-driven market.

“Delays in production caused by import bans, logistics challenges, and global supply chain disruptions have slowed business operations.

 “Frequent policy shifts, overregulation, and excessive taxation have created uncertainties, making long-term business planning difficult,” it stated.

Airtel Africa, Dangote Cement, BUA Foods, six other stocks above $1 billion at the NGX 

Meanwhile, TheRadar earlier reported that of the 160 companies listed on the Nigerian Exchange (NGX) as of November 2024, only a few had $1 billion in market capitalisation, while the NGX had a total market capitalisation of N58.91 trillion ($35.31 billion), with only nine firms accounting for 70.31 per cent of the amount.

The top three companies on the NGX, which are Airtel Africa, Dangote Cement, and BUA Foods, account for 39.77 per cent of the market capitalisation as they have a collective value of N23.535 trillion (approximately $14.046 billion).