Nestle Nigeria Plc, Nigerian Breweries Plc and MTN Nigeria Communication Plc have declared a whooping N954.83 billion loss in 2024, attributable to hike in net loss on foreign exchange transactions, among other macro-economic challenges facing the private sector in Nigeria.
This is an increase of 124 per cent when compared to the N427.14 billion loss declared in 2023FY.
In the period under review, companies operating in Nigeria were faced with dwindling foreign exchange, 27.5 per cent interest rate, double-digit inflation rate that has impacted on operation.
THISDAY analysis of the companies' audited 2024FY result and accounts showed that MTN Nigeria, despite a significant increase in revenue announced N550.33 billion loss, about 209.4 per cent increase when compared to N177.89 billion loss declared in 2023FY.
The telecommunication giant declared N3.36 trillion revenue in 2024, about 36 per cent from N2.47 trillion reported in 2023, but N925.36 billion net foreign exchange losses in 2024 from N740.43 billion in 2023 compounded the company's performance.
In the same vein, Nestle Nigeria declared N221.6 billion loss in 2024 from N104.03 billion in 2023, while Nigerian Breweries closed 2024FY with N182.92 billion loss in 2024 from N145.22 billion loss in 2023.
Nestle Nigeria's 2024FY poor performance is on the heels of N290.7 billion net exchange difference on translation of foreign currency denominated funds from N195.07 billion in 2023 and N652.46 billion cost of sales in the year under review, about 98 per cent growth from N329.9 billion reported in the corresponding period of 2023.
In addition, Nigerian Breweries's N182.92 billion loss was based on N764.52 billion cost of sales in 2024, about 97.5 per cent increase from N387.03 billion reported in 2023 and N252.81 billion net finance expenses in 2024FY, about 33.6 per cent when compared to N189.2 billion in 2023FY.
Following the losses for the second consecutive year, the management of these companies will not be paying dividends to shareholders.
Explaining MTN's performance, its CEO, Mr. Karl Toriola said that the management of the company was encouraged by the resilience of its business in 2024, which reflects a strong commitment to driving growth and managing costs.
Toriola in a statement said, "Despite facing significant macroeconomic headwinds, including record high inflation, as well as ongoing currency and energy price volatility, we remained focused on executing our strategy and creating long-term value for our stakeholders.
"Inflation reached 34.8per cent in December 2024, averaging 33.2per cent for the year, significantly impacting operational costs and consumer purchasing power. The Monetary Policy Rate (MPR) was raised on multiple occasions throughout the year, reaching 27.5per cent, aimed at counteracting naira volatility and elevated inflation.
"This increased our cost of borrowing. In the foreign exchange market, the naira depreciated to N1,535/Dollar by the end of 2024 (from N907.1/Dollar on 31 December 2023), as businesses and consumers continued to grapple with escalating costs.
"However, we took some comfort from the improvement in US dollar liquidity in the forex market and reduced volatility over the course of the year, as the naira exchange rate held relatively stable through H2.
"These headwinds significantly impacted MTN Nigeria's costs, particularly those related to tower leases and other foreign currency obligations. Notwithstanding, through our focus on commercial execution and operational efficiencies, MTN Nigeria delivered a robust topline performance and an encouraging H2 improvement in the bottom line."
Commenting on the results, CEO/Managing Director of Nestlé Nigeria, Mr. Wassim Elhusseini stated, "Our 2024 results demonstrate the resilience of our brands and teams and underscore our strong fundamentals in a challenging business environment. 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."
Looking ahead to 2025,. Elhusseini said, "We remain optimistic that our ongoing initiatives to tackle economic challenges will yield positive results and support consumer demand. Our performance in Q4 2024 demonstrates that we are well-positioned to tackle the current challenges and deliver long-term value to our shareholders, guided by our dedication to operational efficiency and innovation.
"We will prioritize initiatives that create shared value for all stakeholders, as they contribute to our long-term sustainability while we provide nutritious foods and beverages to meet and exceed their expectations."
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In addition, the management of Nigerian Breweries stated, "The Nigerian business landscape in 2024 remained challenging, with economic pressures continuing to shape the operating environment. Inflation maintained its upward trajectory, peaking above 33per cent, while food inflation surpassed 40per cent, further straining consumer purchasing power.
"Foreign exchange volatility and limited access to foreign capital created additional hurdles for businesses, while the lingering effects of the fuel subsidy removal and Naira devaluation significantly increased operating costs across industries.
"Despite these macroeconomic headwinds, the Group recorded an impressive 81% year-on year revenue growth, driven by market expansion, successful innovations, strategic pricing strong cost management initiatives. However, increased interest rates and the impact of the devaluation of the Naira, led to a 34per cent increase in finance costs and impacted overall profitability with net loss increasing by 36per cent.
"As the economic landscape continues to evolve, the Company remains focused on agility, innovation, and operational excellence, ensuring it is well-positioned for future opportunities while continuing to navigate the challenges of the Nigerian business environment."
