The devaluation of the naira has had a significant impact on the operations of multinational companies in Nigeria. The increase in operating costs, particularly finance costs denominated in foreign currencies, has led to a decline in profits for various companies.....KINDLY READ THE FULL STORY HERE▶
The Central Bank of Nigeria (CBN) announced changes in the Nigerian forex operations on June 14, 2023, causing all segments of the market to collapse into the investor and exporter (I&E) window and reintroducing the ‘willing buyer, willing seller’ model….CONTINUE READING
This led to a sharp 60% movement in the exchange rate, reaching N756.24/US$ at the end of June 2023, as the market sought an equilibrium level.
As a consequence, Nestle Nigeria Plc reported a pre-tax loss of N86.5 billion in the second quarter of the year, resulting in wiping out its Q1 profits and leading to one of the worst performances in years with half-year profits standing at N61.6 billion.
MTN Nigeria also experienced a 64% drop in pre-tax profits to N44.6 billion in Q2, with a foreign exchange loss of N131.4 billion impacting its financials. Other companies like Nigeria Breweries and Guinness Nigeria also recorded pre-tax losses of N50.2 billion and a loss after tax of N18.1 billion, respectively.
The managing director/CEO of Nestle Nigeria, Mr. Wassim Elhusseini, highlighted that their profit after tax was negatively affected by the recent naira devaluation, necessitating the revaluation of their foreign currency obligations. Many businesses are struggling under the weight of the naira’s fall, leading to challenging conditions in the market.
