15 hours Ago By Guardian Nigeria
Despite the turbulent economic environment characterised by naira devaluation and foreign exchange (FX) losses, five companies defied the odds to record a combined profit of N539.48 billion in their 2024 operations. The profit was higher than the N273 billion recorded in the corresponding period in 2023, representing an approximately 97.
6 per cent gain. The companies are BUA Foods, Beta Glass, MRS Oil, National Salt Company of Northern Nigeria (NASCON), and BUA Cement. While several companies struggled with the impact of the naira devaluation, with some seeing their shareholders’ funds wiped out, the firms successfully navigated the crisis, leveraging strategic pricing, cost optimisation and operational efficiency to boost their bottom line.
For instance, despite N188 billion FX losses incurred by BUA Foods, up from N81.8 billion in 2023, the company achieved a profit of N289 billion. The figure represented a 167 per cent rise over N108 billion posted in 2023.
Similarly, NASCON posted N23.6 billion profit within the period, a 14.9 per cent increase over N20.
5 billion posted the previous year. The company incurred FX losses of N3 billion, which contributed to a 25 per cent decline in profit after tax (PAT) to N1.2 billion in the first quarter of 2024.
The company faced an FX loss of N1.8 billion in the third quarter of 2024, leading to a 19 per cent decline in PAT, bringing it to N9 billion for the quarter. Despite these challenges, the company achieved a 14.
9 per cent increase in profit, reaching N23.6 billion for the full year, up from N20.5 billion in 2023.
For Betaglas Plc, its profit rose from N62.9 billion in 2023 to N117.9 billion despite the N2 billion FX loss it suffered within the period.
MRS Oil’s 2024 profit stood at N9.7 billion, higher than the N5.9 billion recorded in 2023.
The company’s FX losses stood at N1.2 billion. Also, BUA cement FX loss rose from N5.
5 billion to N6.9 billion. However, its profit also increased to N99.
6 billion, up from N73 billion posted in 2023. A major driver of the growth was their ability to pass on rising costs to consumers through price adjustments, ensuring sustained revenue growth despite inflationary pressures. Also, firms like BUA Foods and NASCON benefited from strong demand for essential goods, while MRS Oil took advantage of increased fuel consumption and improved distribution efficiency.
Beta Glass, on the other hand, capitalized on its market dominance in the packaging industry, and BUA Cement maintained its profitability through enhanced production capacity and economies of scale. One of the biggest challenges faced by Nigerian businesses in 2024 was the devaluation of the naira, which resulted in higher costs for imported raw materials, increased debt obligations for firms with dollar-denominated loans, and severe pressure on operating expenses. Many companies recorded substantial FX losses, which in some cases, eroded shareholders’ funds and led to negative equity positions.
The five firms were able to mitigate the impact of currency volatility through a combination of strategic pricing, operational efficiency, and market positioning. But operators argued that sustaining this momentum amid continued currency volatility requires proactive measures. An independent investor, Amaechi Egbo, said the government must implement policies to stabilise the foreign exchange market, curb inflation and improve access to FX for manufacturers.
According to him, addressing structural challenges such as high energy costs and poor infrastructure will also be critical in mitigating the financial strain on businesses. On the part of the firms, he said these companies must strengthen their FX risk management strategies by diversifying supply chains, increasing local sourcing of raw materials and exploring hedging options. He also added that expanding exports could also serve as a buffer against currency devaluation by generating foreign-denominated revenue.
As Nigeria’s business environment remains uncertain, the resilience displayed by these firms offers a blueprint for navigating economic turbulence. With the right policy interventions and corporate strategies, more companies could turn FX losses into opportunities for long-term growth..
