Dangote Cement, MTN, and Others’ OPEX Reached N1.01 Trillion in Q1 as Inflation and FX Scarcity Persisted.

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Due to double-digit inflation, a foreign exchange shortage made worse by the general elections, and the slow expansion of the country’s economy, MTN Nigeria Communication Plc, Dangote Cement Plc, and 15 other listed companies on the Nigerian Exchange Limited (NGX) saw their operating expenses to income increase by 31% in the first quarter of 2023.

Manufacturers including Dangote Cement, Lafarge Africa Plc, and BUA Cement saw considerable increases in OPEX, accounting for 12.3% of total OPEX in the first quarter of 2023 compared to 12.9% in the first quarter of 2022.Dangote Cement recorded N87.39 billion in OPEX in the first quarter of 2023, up 13% from N77.6 billion in the same period the previous year, while Lafarge Africa reported N24.4 billion, up from N20.59 billion.

The operating environment during the period under review was very challenging for businesses. This is also reflected in the huge differential between farm gate prices and market prices; monetization of fiscal deficit (CBN financing of deficit) is highly inflationary because of the liquidity injection effects on the economy.

This becomes worrisome when statutory thresholds are exceeded and high transactions costs at the nations ports increases production and operating costs of businesses. On his part, the Vice President, Highcap securities, Mr. David Adnori said the inflationary pressure and scarcity of foreign exchange were key drivers of companies OPEX in Q1 2023, stressing that hike in interest rate by CBN also contributing factor.


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