Several leading manufacturers in Nigeria have reported a cumulative loss of N1.91 billion in foreign exchange (FX) volatility in the first quarter of 2025. This marks a significant financial challenge for companies operating in the country, where currency fluctuations have consistently impacted business operations.
The latest data, disclosed in the unaudited financial statements for the period ending March 31, 2025, reveals that well-known companies including Nascon Allied Plc, BUA Cement, Nigerian Breweries, Dangote Cement, Vitafoam Nigeria, Beta Glass, and Berger Paints have all experienced negative impacts due to the ongoing instability in the foreign exchange market.
Nascon Allied Plc reported a foreign exchange loss of N55.38 million in Q1 2025, a significant improvement when compared to the N3.06 billion loss posted during the same period in 2024. This reduction in FX loss signals that the company is navigating the volatile currency environment more effectively, marking a positive shift in its financial health.
BUA Cement, one of the major players in the Nigerian cement industry, recorded a foreign exchange loss of N262.71 million for Q1 2025. This represents a sharp decline from the N1.11 billion gain posted during the same period in 2024, highlighting the adverse impact of currency fluctuations on the cement manufacturing sector. The drop in FX gains for BUA Cement marks a 123.6% decrease, reflecting the broader economic challenges in the country.
Nigerian Breweries, one of Nigeria’s largest beverage manufacturers, reported a foreign exchange loss of N178.01 million in Q1 2025. While the company still faced losses, this was a marked improvement of 144.3% from the staggering N72.85 billion loss experienced in the first quarter of 2024. The reduction in FX losses for Nigerian Breweries signals positive strides in managing currency risk amid Nigeria’s complex exchange rate environment.
Dangote Cement also felt the brunt of foreign exchange volatility, with a recorded forex loss of N11.84 million in Q1 2025, a stark contrast to the N410.36 million gain posted in the same period of the previous year. This marks a 102.9% decline in foreign exchange gains for the cement giant, underlining the ongoing challenges faced by manufacturers in maintaining profitability in light of currency depreciation.
Vitafoam Nigeria’s performance took a significant hit, with the company reporting a foreign exchange loss of N1.31 billion in Q1 2025. This represents a massive 2,687.7% increase from the N47.18 million loss recorded in the same period of 2024. The steep rise in FX losses for Vitafoam points to the substantial impact of currency volatility on the manufacturing sector, especially for companies heavily reliant on imported raw materials.
Beta Glass, a key player in the glass manufacturing industry, also reported an increase in its foreign exchange losses. The company experienced a loss of N94.22 million, up 329.2% from the N21.98 million loss in Q1 2024. This spike in losses indicates that the glass manufacturing sector is similarly grappling with FX instability.
On a smaller scale, Berger Paints recorded a modest foreign exchange loss of N768 in Q1 2025, a slight deviation from the zero-loss position in the same period last year. While this loss is relatively insignificant compared to other companies, it still reflects the broader economic strain on manufacturers across sectors.
The total foreign exchange loss for the listed manufacturing companies in Q1 2025 stands at N1.91 billion. This marks a 37.8% reduction compared to the N3.06 billion loss recorded in the same period in 2024, signaling a moderate improvement for the sector. While the overall FX losses have decreased, the sector still faces challenges in maintaining profitability due to the ongoing fluctuations in the Nigerian foreign exchange market.
The manufacturing sector is a critical part of Nigeria’s economy, and the impact of FX volatility continues to weigh heavily on the financial stability of these companies. In recent months, the Nigerian Exchange Limited (NGX) has reported that a number of companies have faced combined foreign exchange losses running into billions of naira, further illustrating the strain currency fluctuations have on the country’s industrial capacity.
The challenge of managing foreign exchange risks is one that continues to impact the bottom line of businesses in Nigeria, especially those reliant on imports or foreign investments. With inflationary pressures and the potential for further depreciation of the naira, companies operating in the manufacturing sector may need to adopt more robust risk management strategies to mitigate these risks and protect their profitability.
As the Nigerian economy continues to experience foreign exchange volatility, manufacturers are finding it increasingly difficult to maintain financial stability. The reported foreign exchange losses for Q1 2025 highlight the broader economic challenges faced by these companies and the need for effective currency risk management practices. Although some companies, like Nascon Allied, have seen improvements, others, such as Vitafoam and BUA Cement, have faced sharp declines in their forex positions, underscoring the difficult operating environment for manufacturers in Nigeria.