12 Listed Companies Report N1.4 Trillion Losses, May Not Pay Dividends
- Twelve businesses listed on the Nigerian Exchange reported a combined FX loss of N1.4 trillion
- These losses happened due to circumstances beyond their control, and the result is that shareholders might need to wait another year for dividends
- Industry experts have also recommended ways that companies can hedge against such losses in the future
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Legit.ng journalist Ruth Okwumbu-Imafidon has over a decade of experience in business reporting across digital and mainstream media.
Amid the turbulent economic environment in 2024, twelve companies listed on the Nigerian Exchange (NGX) have reported a cumulative Foreign Exchange (FX) loss of N1.4 trillion.
The businesses cut across telecommunications, food production and manufacturing, and their huge losses provide further insights into the massive impacts of forex volatility on corporate earnings.
For most of these companies, like MTN Nigeria, Guinness Nigeria, Oando Plc, Nigerian Breweries and BUA Cement, the losses surged from the losses recorded the previous year.
Source: Getty Images
Breakdown of the N1.4 trillion FX loss
MTN Nigeria was the highest with N925.36 billion FX loss in 2024, up from the N740.43 billion loss reported in 2023.
Bua Cement Plc’s FX loss grew from N69.96 billion in 2023 to N92.10 billion in 2024, while BUA Foods Plc reported N100.40 billion in FX losses in 2024, almost four times higher than N26.33 billion in 2023.
For Nigerian Breweries, FX losses in 2024 amounted to N157.59 billion, slightly up from N153.33 billion in 2023.
Guinness Nigeria Plc’s FX loss grew from N3.89 billion in 2023 to N42.49bn loss in 2024, while Nestlé Nigeria Plc went from a N9.36 billion forex gain in 2023 to a N7.06 billion loss in 2024.
Some narrowed their FX losses
Oando Plc saw its FX loss narrow down from N132.69 billion in 2023 to N64.17 billion in 2024, just like Honeywell Flour Mills Plc where FX losses reduced from N20.19 million to N8.56 million.
The loss also reduced significantly for Lafarge Africa Plc from N14.91 billion in 2023 to N600.17 million in 2024, the PUNCH reports.
Some others experienced a reversal going from making FX gains in 2023 to FX losses in 2024. Nascon Allied Industries Plc reported a N2.06 billion loss in 2024, wiping out the N228.37m forex gain in 2023.
Similarly, the Nigerian Aviation Handling Company reversed its N509.33 million gain in 2023, with a huge N1.85 billion loss in 2024. Beta Glass Plc suffered a N2 billion loss in 2024, erasing the N1.79 billion gain recorded in 2023.
The companies may not pay dividends
CEO of Cowry Treasurers Limited, Mr. Charles Sanni noted that the FX losses were mostly felt by those companies that heavily depend on imports for their raw materials or other manufacturing components and that the impact extends to the consumers who are made to bear the brunts.
Source: Getty Images
He noted that with such huge losses, paying dividends would amount to eroding shareholders' funds.
Sanni said;
“You can only pay dividends from profits. If they pay despite these losses, they risk running into negative shareholder funds. This might not be immediate, but eventually, banks will hesitate to lend more money to them.”
He urged the companies to rethink their strategy and reduce FX exposure just like MTN Nigeria had done, to avoid being driven out of business.
MTN and Airtel to become profitable again after FX losses
In related news, analysts have projected profitability for MTN Nigeria and Airtel Africa in 2025, despite the huge FX losses.
Recall that MTN Nigeria has had two consistent years of reporting losses, without paying a single dividend to shareholders.
Analysts noted that with the reduced FX exposure, and 50% hike in tariffs, both telecom operators should see an improved balance sheet in 2025.
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Source: Legit.ng
