The foreign exchange challenge that has plagued Nigerian companies since the start of the current administration appears to be easing, as reflected in the foreign exchange gains and losses recorded in Q1 2025 compared to FY 2023, Q1 2024, and FY 2024.
In Q1 2025, ten leading Nigerian companies recorded a net foreign exchange loss of N22.114 billion, down significantly from the combined loss of N1.179 trillion reported in Q1 2024, according to data collated by Nairametrics from their unaudited financial statements.
The companies span across sectors, including consumer goods, telecommunications, cement, and oil and gas, and include MTN Nigeria, Dangote Cement, Dangote Sugar, Nigerian Breweries, BUA Foods, BUA Cement, Nestlé, Cadbury, Lafarge Africa, and Aradel Holdings.
All reported significant improvements in bottom-line performance because of more favorable FX conditions.
While MTN Nigeria, Nestlé, Dangote Cement, BUA Cement, and Nigerian Breweries reported a significant decline in FX losses, Dangote Sugar Refinery, BUA Foods, Cadbury, Lafarge Africa, and Aradel Holdings recorded FX gains in Q1 2025 compared to the heavy losses reported in previous periods.
This consequently had a positive impact on earnings. Combined pre-tax profit surged by 252% to N998.1 billion in Q1 2025, compared to a pre-tax loss of N656 billion in Q1 2024.
This also represents more than a 200% increase over the combined pre-tax profit posted in both FY 2023 and FY 2024.
The improved foreign exchange situation can largely be attributed to a more stable naira exchange rate environment, improved FX liquidity, lower foreign currency debt exposure, and proactive risk management strategies by companies.
The staggering FX losses in previous quarters were mainly triggered by the sharp devaluation of the naira following the Tinubu administration’s foreign exchange unification policy launched in June 2023.
To put the FX pressure into perspective:
- The exchange rate opened 2023 at N461.50/$1,
- Closed the year at N907.11/$1,
- Ended 2024 at N1,535/$1.
This rapid devaluation caused massive FX losses for Nigerian companies. By the end of March 2025, however, the exchange rate had largely stabilized, closing at N1,537/$1, showing minimal movement from the previous quarter.
Company-specific analysis:
Dangote Cement topped the list with a significantly reduced foreign exchange loss of N17.47 billion in Q1 2025, representing a 72.6% decline from the N63.77 billion loss in Q1 2024.
The Q1 2025 figure is also far lower than the N249 billion loss in FY 2024 and N164 billion in FY 2023.
This FX improvement contributed to the company’s massive N311.97 billion pre-tax profit in Q1 2025 compared to N166.4 billion in the same period last year.
However, Dangote Cement continues to carry a massive debt profile of N2.26 trillion, the highest among the companies under review.
MTN Nigeria reported a significantly reduced foreign exchange loss of N5.53 billion in Q1 2025, compared to the massive N656.4 billion loss in Q1 2024.
This reduction, along with improved revenue performance, helped the telecommunications giant post a pre-tax profit of N202.65 billion in Q1 2025, a remarkable turnaround from the N575.69 billion loss in the same period last year.
BUA Cement also saw a significant reduction in its foreign exchange loss, which dropped to N837 million in Q1 2025, marking a 91.68% decline from the N10 billion loss recorded in Q1 2024.
Despite other operating costs, the decline in FX losses positively impacted the company’s bottom line, leading to a 369% year-on-year surge in pre-tax profit to N99.74 billion in Q1 2025.
Nigerian Breweries saw a significant reduction in its foreign exchange loss, which dropped to N178 million in Q1 2025, a sharp decline from the N72.85 billion loss incurred in Q1 2024. By the end of 2024, the company’s FX loss had ballooned to N157.60 billion for the year, reflecting a 2.78% year-on-year increase.
However, with the reduction in foreign exchange losses in Q1 2025, Nigerian Breweries recorded a pre-tax profit of N69.99 billion in contrast to the N65.47 billion pre-tax loss reported in Q1 2024.
Nestlé Nigeria saw a significant reduction in its foreign exchange loss, which dropped to N163 million in Q1 2025, representing a 99.9% year-on-year decline from the N191.67 billion loss in Q1 2024.
This improvement is also notable when compared to the N290.7 billion FX loss incurred for the full year of 2024.
The FX loss reduction contributed to the reported pre-tax profit of N51.16 billion in Q1 2025, compared to a N196.1 billion pre-tax loss in Q1 2024.
Dangote Sugar Refinery saw a significant turnaround in Q1 2025, shifting from a N102.98 billion FX loss in Q1 2024 to a N102 million FX gain in Q1 2025.
This improvement contributed to a decline in pre-tax loss to N22.63 billion, compared to the N106.86 billion pre-tax loss reported in Q1 2024.
For the full year of 2024, Dangote Sugar incurred N208.9 billion in FX losses, which was 9.63% higher than the N172.2 billion loss in 2023.
Cadbury Nigeria saw some relief, recording a N178 million FX gain in Q1 2025, compared to the N11.55 billion FX loss in Q1 2024.
This improvement helped the company report a pre-tax profit of N8.54 billion, compared to a pre-tax loss of N10.46 billion in Q1 2024.
The company reported a pre-tax loss of N28 billion in FY 2024 and N32 billion loss in 2023, largely driven by foreign exchange losses.
Aradel Holdings reported a net foreign exchange gain of N220 million in Q1 2025, a significant improvement compared to the N21.32 billion FX loss in Q1 2024. This contributed to the pre-tax profit growth of 70% YoY to N67 billion in Q1 2025.
BUA Foods reported a foreign exchange gain of N486 million in Q1 2025, a notable improvement compared to the N27.285 billion FX loss incurred in Q1 2024.
Alongside this, the company saw a 75% year-on-year decline in its interest expenses, which fell to N3.768 billion, contributing positively to its bottom line.
BUA Foods’ pre-tax profit grew 119% year-on-year to N136 billion, representing over 47% of the company’s full-year pre-tax profit for 2024.
By the end of 2024, the company’s foreign exchange loss had ballooned to N173.29 billion, marking a significant 111.68% YoY increase.
Lafarge Africa (WAPCO) saw a remarkable improvement in its foreign exchange position, shifting from a N21.8 billion loss in Q1 2024 to a N1.076 billion gain in Q1 2025.
This shift positively impacted its bottom line, positioning WAPCO as the top performer among the companies under review.
As a result, pre-tax profit surged by 739.47%, reaching N73.113 billion.
In 2024, the company reported a net FX loss of N24.271 billion, marking a 15.3% increase from the N21.045 billion recorded in 2023.
The significant reduction in foreign exchange losses across key Nigerian companies in Q1 2025 signals a positive shift, largely driven by improved FX liquidity, a more stable naira exchange rate, and better risk management practices.
As a result, companies are posting stronger earnings, with combined pre-tax profits surging by 252% year-on-year.
While challenges remain, particularly for companies with high foreign debt, the improved FX conditions suggest that Nigerian corporates are better positioned for growth in 2025.
