Some of Nigeria’s leading companies incurred a combined forex loss of N2.17 trillion in the financial year 2024, according to data collated by Nairametrics from published financial statements.
The sheer size and magnitude of the losses were so significant that they negatively impacted the bottom line for some firms.
These staggering losses were largely triggered by the devaluation of the naira, following the Tinubu administration’s foreign exchange unification policy launched in June 2023.
In context, the exchange rate opened 2023 at N461.5/$1, closed the year at N907.11/$1, and ended 2024 at N1,535/$1. This sharp devaluation led to massive FX losses for Nigerian businesses with dollar-denominated obligations, as these liabilities were revalued in naira terms.
The losses spanned multiple sectors, including consumer goods, telecommunications, and cement:
- Affected companies include MTN Nigeria, Dangote Cement, Nigerian Breweries, and BUA Foods—all giants in their industries.
- Foreign-owned multinationals such as Nestlé, Cadbury, and Lafarge Africa were also hit hard.
- Aradel Holdings, a key indigenous player in energy, also featured prominently.
Despite a 64.38% increase in combined revenue to N13.452 trillion, these firms recorded a 6.03% decline in aggregate pre-tax profits to N332.227 billion, due largely to FX pressures.
MTN Nigeria topped the list with a combined foreign exchange loss of N925.361 billion, representing 42.65% of the total FX losses recorded by the companies under review. This figure marks a 24.98% increase compared to 2023.
According to the company’s financial report:
- Realized FX losses accounted for 60.73% of the total, amounting to approximately N562 billion.
- The remaining 39.27% (N363 billion) was unrealized, resulting from the revaluation of foreign-denominated obligations.
- Both components were charged to the income statement, pushing MTN Nigeria’s pre-tax loss up by 209% to N550.326 billion in 2024.
Nestlé Nigeria also joined the list of companies heavily impacted by foreign exchange volatility, recording a 49% year-on-year increase in FX losses, which rose to N290.700 billion.
This figure accounts for 13.40% of the combined forex losses incurred by the ten companies under review.
Breaking it down:
- Realized exchange loss: N57.598 billion
- Unrealized FX loss: N233.102 billion
As a result of these heavy forex losses, Nestlé Nigeria’s pre-tax loss surged by 113%, reaching N221.589 billion during the period.
The Dangote Group
The Dangote Group’s cement and sugar operations incurred a combined N458.225 billion in FX losses:
- Dangote Cement: N249.322 billion
- Dangote Sugar Refinery: N208.903 billion
Dangote Cement, in its 2024 financial results, attributed the foreign exchange loss to widespread currency devaluation across its African markets. “In 2024, currency devaluation emerged as a significant factor shaping the economic landscape across Africa, with most currencies in our operational countries experiencing depreciation,” the company stated.
The high FX burden significantly impacted on the group’s overall profitability, despite posting strong top-line figures.
While Dangote Cement delivered a 34% growth in pre-tax profit to N732.537 billion, Dangote Sugar’s performance deteriorated sharply, with pre-tax losses worsening by 149% to N270.894 billion.
BUA Group:
The BUA Group, comprising BUA Cement and BUA Foods, recorded a total FX loss of N265.399 billion, weakening the group’s bottom-line outlook:
- BUA Foods: N173.293 billion, up 112% YoY
- BUA Cement: N92.105 billion, up 32% YoY
Despite the FX loss, BUA Foods recorded one of the strongest profit margins among the companies under review, at 17%, second only to Aradel’s impressive 44%.
Nigerian Breweries:
Nigerian Breweries reported foreign exchange losses of N157.597 billion in 2024, marking a 2.78% year-on-year increase.
- While the growth is modest, the absolute figure remains a significant drag on the company’s financials. The losses were largely attributed to the devaluation of the Naira.
- To mitigate future currency risks, the company implemented several strategies, including utilizing proceeds from its Rights Issue to reduce FX exposure.
- As a result of these efforts, operating profit surged by 145%, while net finance costs dropped by 75%, leading to a return to profitability in Q4 2024 the first time in two years.
Nevertheless, the company still recorded a pre-tax loss of N182.419 billion, representing a 26.08% increase year-on-year, highlighting that currency pressure continues to weigh heavily on overall performance.
Cadbury Nigeria:
Cadbury Nigeria saw some relief in 2024, recording a total FX loss of N28.311 billion; a 24.6% decline from the N37.558 billion posted in 2023.
The company’s realized FX losses dropped to N26.051 billion from N30.072 billion, while unrealized losses fell by nearly 70% to N2.261 billion from N7.486 billion.
This reduction in FX losses helped cushion the company’s earnings, with pre-tax loss declining by 12% to N28.326 billion.
WAPCO:
WAPCO experienced a significant surge in realized FX losses, which rose to N24.871 billion in 2024, up from N6.134 billion in 2023.
However, the company recorded an unrealized FX gain of N600.174 million, a notable reversal from the N14.911 billion unrealized loss reported in the previous year.
Despite this partial offset, WAPCO’s net FX loss widened to N24.271 billion, reflecting a 15.3% increase from the N21.045 billion recorded in 2023.
Aradel Holdings:
Aradel Holdings, on the other hand, posted a net FX loss of N19.616 billion in 2024, composed of a realized FX loss of N28.966 billion, partially offset by a realized FX gain of N9.350 billion.
This marked a 133% increase compared to the N8.386 billion FX loss recorded in 2023; the highest year-on-year growth in FX-related losses among the companies reviewed.
- Overall, the N2.17 trillion forex losses incurred by Nigeria’s top companies in 2024 highlight the severe impact of naira devaluation following the unification policy.
- While companies like MTN, Nestlé, and Dangote Cement saw revenue growth, the currency losses significantly affected their bottom lines, leading to substantial pre-tax losses.
Despite efforts to reduce FX exposure, the volatile naira continues to challenge profitability.
The outlook still depends on currency stability and broader economic conditions.
