Six companies listed on the Nigerian Exchange Limited reported a combined foreign exchange (FX) loss of N255.72 billion for the year ending December 31, 2024. These losses were mainly due to the depreciation of the naira and ongoing volatility in the foreign exchange market. The companies affected include BUA Foods, Caverton Offshore Support Group, Honeywell Flour Mills, FTN Cocoa Processors, Beta Glass Plc, MRS Oil Nigeria, and CWG Plc. FX losses occur when the value of a company’s foreign currency-denominated assets or liabilities decreases due to fluctuations in exchange rates.
Among the companies, BUA Foods recorded the highest FX loss of N188.7 billion, up from N81.86 billion in 2023. Despite this, BUA Foods posted a profit before tax of N289.1 billion and a net profit after tax of N274.9 billion. Caverton Offshore Support Group’s FX loss surged from N4.65 billion in 2023 to N43.49 billion in 2024, contributing to its total operating loss of N50.53 billion. Honeywell Flour Mills experienced a reduction in its FX loss to N8.56 billion, though its revenue rose significantly from N123.99 billion to N277.06 billion.
FTN Cocoa Processors reported an FX loss of N11.68 billion, an increase from N10.18 billion in 2023. Its operating loss stood at N10.31 billion, with revenue of N1.38 billion. Beta Glass Plc switched from an FX gain of N1.79 billion in 2023 to a loss of N2.00 billion in 2024, but its revenue grew to N117.58 billion, and its operating profit increased to N24.39 billion. MRS Oil Nigeria also experienced a decrease in its FX loss, reporting N1.29 billion in 2024, down from N3.22 billion in 2023, alongside a significant increase in revenue and operating profit.
The rise in FX losses across these companies has been attributed to the devaluation of the naira following the Central Bank of Nigeria’s exchange rate unification policy. Analysts are concerned that if forex stability is not achieved, more companies could face deeper losses in 2025. These challenges may also affect overall market confidence, with the potential for broader economic consequences
The recent rise in foreign exchange-related losses comes amid broader concerns about Nigeria’s external liquidity position. The country’s foreign exchange reserves have seen a sharp decline, dropping by $832.62 million between January 6 and 21, 2025. This decline marks the largest fall in reserves since April 2024, raising additional worries about Nigeria’s financial stability. Further increases in FX losses, especially among major manufacturers, could have significant implications for the economy.
Source: Punch