Article Summary
- Companies listed on the Nigerian Exchange reported a cash balance of N1.8 trillion at the end of March 2023, up from N1.2 trillion in the same period in 2022.
- About 24 of the companies generated a total of N444 billion from their operations during the quarter, suggesting most of the cash balances were from the previous year.
- The top 5 companies with the largest cash balances are MTN, Dangote Cement, Seplat Petroleum Development Company, Dangote Sugar Refinery, and Lafarge Africa.
Companies quoted on the Nigerian Exchange reported a healthy cash balance of N1.87 trillion at the end of March 2023 a significant rise from the N1.27 trillion reported in the same period in 2022.
The total cash balance at the end of 2022 was N1.65 trillion.
Nairametrics tracks the performance of 30 Nigerian companies operating in the construction, oil and gas, manufacturing, agriculture, real estate, and technology sectors also known as COMARTs. This data excludes commercial banks.
One way to measure the financial strength of these companies is by looking at their cash balances, which reflect the amount of money they have available to invest, pay dividends, or use for other strategic purposes.
As of March 31, 2023, the cash balances of Nigerian companies varied widely, with some reporting significant increases over the past year, while others experienced declines.
Overview of the data
The cash balances of companies include cash generated from operations, which is cash collected from their customers after deducting the amount paid to suppliers.
It also includes cash generated from bank loans after paying debt servicing and finally, the cash generated from the sale of investments after netting off cash spent on new investments. This is also added to cash in the bank from the start of the year.
During the quarter, companies, 24 of them, generated a total of N444 billion from their operations, suggesting most of the cash balances were from the balance generated a year ago.
Total loans including short and long-term loans were N3 trillion as of March 2023 compared to N2.6 trillion same period last year, suggesting the companies took on more debt to shore up their financial muscle. About N1.6 trillion of the total loans borrowed as of March 2023 were long terms loans.
In terms of the amount spent on investments, the companies spent a net N221 billion in the first quarter compared to N732 billion in the corresponding quarter of 2022 suggesting that companies cut back on spending this year. A major reason for the drop was MTN which spent a net N246.3 billion on investments in 2022 first quarter compared to N76 billion this quarter.
Companies with the largest Cash in their balance sheet
Let’s take a closer look at the top 10 companies with the highest cash balances and how their positions have changed over time.
6. Nestle Nigeria: Nestle Nigeria reported a cash balance of N102,045 million in 2023 Q1, up from N95,589 million in 2022 Q1 and N71,440 million in 2021 Q1. The company is a subsidiary of Nestle, a Swiss multinational food and beverage company.
5. Lafarge Africa: Lafarge’s cash balance grew from N35,467 million in 2022 Q1 to N106,516 million in 2023 Q1. The company is a leading producer of cement in Nigeria and is a subsidiary of LafargeHolcim, a global leader in building materials. The cash balance at the end of 2022 was N118,398 million.
4. Dangote Sugar Refinery: Dangote Sugar Refinery reported a cash balance of N203,020 million in 2023 Q1, up from N128,594 million in 2022 Q1 and N68,637 million in 2021 Q1. The company is one of the largest producers of sugar in Nigeria.
3. Seplat Petroleum Development Company: Seplat’s cash balance increased from N129,973 million in 2022 Q1 to N211,885 million in 2023 Q1. The company is a leading independent oil and gas exploration and production company in Nigeria.
2. Dangote Cement: Dangote Cement reported a cash balance of N255,194 million in 2023 Q1, up from N218,304 million in 2022 Q1 and N147,871 million in 2021 Q1. The company has consistently been one of the largest cement producers in Nigeria and Africa.
1. MTN Nigeria: With a cash balance of N564,992 million in 2023 Q1, MTN is the company with the largest cash reserve on this list. The company’s cash position has more than tripled over the past two years, from N348,064 million in 2021 Q1 to N210,704 million in 2022 Q1 and finally to its current level.
Correction: This article was updated to correct the 2022 Q1 figures stated in the post versus what is in the table above. We erroneously picked 2022 Q2 figures instead of 2022 Q1. This has now been updated.
