Market News

BY  Kayode Tokede

There appears to be no respite for companies under the Fast-Moving Consumer Goods (FMCG) as four of them declared N533 billion loss before tax in the half year (H1) ended June 30, 2024, over the effect of naira devaluation, double-digit inflation rate and Central Bank of Nigeria’s (CBN) increase in its Monetary Policy Rate (MPR).

These companies had reported a N192.8 billion loss before tax in H1 2023. The four FMCG companies are Nigerian Breweries Plc, Cadbury Nigeria Plc, Nestle Nigeria Plc, and International Breweries Plc. The H1 2024 results showed that Nestle Nigeria, followed by Nigerian Breweries declared the highest loss before tax. Nestle Nigeria declared a N252.53 billion loss before tax in H1 2024 from N69.12 billion in H1 2023, while Nigerian Breweries announced a N116.34 billion loss before tax in H1 2024 from N67.84billion in H1 2023.

In addition, International Breweries, in its unaudited result and accounts, declared N150.23billion loss before tax in H1 2024 from N41.43billion reported in H1 2023 just as Cadbury Nigeria posted a N13.88 billion loss before tax in H1 2024 from a N14.53 billion loss before tax in H1 2023. In the period under review, the inflation rate increased to 34.19 per cent from 22.79 per cent in June 2023, while the naira against the dollar stood at N1,470.191 from N770.38 in June 2023.

Also, the MPR was 26.25 per cent on June 30, 2024, from 18.50 per cent as the Central Bank of Nigeria (CBN) tackled the rising inflation rate and unstable naira at the foreign exchange market. Operators said the rising interest rate and devaluation were the two major elements affecting FMCG companies as some of the companies had foreign currency-denominated loans in their books.