Three of Nigeria’s corporate giants - Nestle Nigeria Plc, Nigerian Breweries Plc, and MTN Nigeria Communication Plc; have collectively declared a staggering N954.83 billion loss for the financial year ended December 31, 2024. This represents a 124% increase compared to the N427.14 billion loss reported in 2023, driven primarily by foreign exchange (forex) losses and macroeconomic challenges.
Key Highlights of the Losses
MTN Nigeria: Reported a N550.33 billion loss, a 209.4% increase from N177.89 billion in 2023, despite a 36% revenue growth to N3.36 trillion. Net forex losses surged to N925.36 billion from N740.43 billion in 2023.
Nestle Nigeria: Declared a N221.6 billion loss, up from N104.03 billion in 2023, with net exchange differences on foreign currency translation rising to N290.7 billion. Cost of sales also jumped 98% to N652.46 billion.
Nigerian Breweries: Recorded a N182.92 billion loss, compared to N145.22 billion in 2023, as cost of sales increased by 97.5% to N764.52 billion, and net finance expenses rose by 33.6% to N252.81 billion.
Macroeconomic Challenges
The companies attributed their poor performance to a combination of factors, including:
Forex Volatility: The naira depreciated to N1,535 per dollar by the end of 2024, up from N907.1 in 2023, significantly increasing the cost of foreign currency obligations.
High Inflation: Inflation averaged 33.2% in 2024, peaking at 34.8% in December, eroding consumer purchasing power and increasing operational costs.
High Interest Rates: The Monetary Policy Rate (MPR) was raised to 27.5%, increasing borrowing costs for businesses.
Management Perspectives
MTN Nigeria’s CEO, Karl Toriola, acknowledged the challenging environment but highlighted the company’s resilience. “Despite facing significant macroeconomic headwinds, we remained focused on executing our strategy and creating long-term value for our stakeholders,” Toriola said. He noted that improved forex liquidity in the second half of 2024 provided some relief, but forex-related costs continued to weigh heavily on the company’s performance.
Nestle Nigeria’s CEO, Wassim Elhusseini, emphasized the impact of forex losses on the company’s profitability. “Our net profit and equity were impacted by high finance costs associated with the revaluation of the company’s foreign currency obligations, due to an unprecedented devaluation of the naira,” Elhusseini stated. He expressed optimism for 2025, citing ongoing initiatives to tackle economic challenges and improve operational efficiency.
Nigerian Breweries’ management highlighted the company’s revenue growth of 81% year-on-year, driven by market expansion and strategic pricing. However, increased finance costs and forex losses overshadowed this growth. “The Nigerian business landscape in 2024 remained challenging, with economic pressures continuing to shape the operating environment,” the company stated.
No Dividends for Shareholders
For the second consecutive year, the three companies will not be paying dividends to shareholders due to their significant losses. This decision reflects the severity of the macroeconomic challenges and the need to preserve capital for future operations.
Outlook for 2025
Despite the setbacks, the companies remain cautiously optimistic about 2025. MTN Nigeria plans to focus on cost management and operational efficiency, while Nestle Nigeria aims to prioritize initiatives that create shared value for stakeholders. Nigerian Breweries is committed to agility, innovation, and operational excellence to navigate the evolving economic landscape.