Manufacturing companies, especially those under the Fast-Moving Consumer Goods sector, have extended last year's losses into the first quarter with financial reports of four firms in the sector reporting combined foreign exchange losses of about N300 billion.
The new round of FX losses in 2024 is based on the depreciation of the naira from N912 to about N1300 in Q1. Also, those that require imported raw materials to aid their production, will report higher cost of sale as a result of the Naira depreciation. Although this can easily be transferred to the final consumer room support revenues operators have argued that for any company exposed to either FX loans or imports, a weak Naira will continually impact their bottom line and possibly threaten the company’s existence if the losses are extended for too long.
According to him, it will take these companies that made huge FX losses up to three years to recover by cleaning up their books while those that have decided to raise fresh equity by way of rights like NB and International Breweries would clear the financial losses this year. In 2023, the group recorded a N36.9 billion FX loss, resulting in a retained loss of N11.4 billion and a negative equity of N6.5 billion.However, overall profit before tax was impacted by N22.5 billion foreign exchange losses during the quarter, leading to a N9.3 billion loss.According to the company, sales grew by 43.4 percent to N183.5 billion, compared to N127.97 billion in the same period last year while gross profit stood at N49.1 billion, against N51.6 billion in the same period of 2023.
However, a net finance cost of N90.8 billion caused the group to post a pre-tax loss of N65.6 billion within the period. Additionally, he said further sensitivity analysis can be conducted to ascertain expected material effects while these firms can review and optimise costs in the mid-term and also explore revenue diversification opportunities and enhance operational efficiency.Before flagging, please keep in mind that Disqus does not moderate communities. Your username will be shown to the moderator, so you should only flag this comment for one of the reasons listed above.
Fast-Moving Consumer Goods (FMCG) Flour Mills Of Nigeria Plc FX Crisis Nestle Nigeria Plc
Nigeria Latest News, Nigeria Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: TheNationNews - 🏆 6. / 69 Read more »
Source: NigeriaNewsdesk - 🏆 10. / 63 Read more »
Source: TheNationNews - 🏆 6. / 69 Read more »
Source: thecableng - 🏆 2. / 80 Read more »
Source: vanguardngrnews - 🏆 5. / 75 Read more »
Source: GuardianNigeria - 🏆 1. / 94 Read more »