Naira Devaluation Rubbishes Companies Earnings
The Nigerian naira devaluation has continued to rubbishes earnings, and damaged balance sheet quality of some listed companies on the Nigerian Exchange.
The market has seen sustained increase in earnings loss being churned out by small, mid and large corporate entities that are publicly listed.
MTN Nigeria, Nestle and International Breweries are among the latest companies whose huge FX losses has damaged their balance sheet quality.
It is not yet clear what the Nigerian government has achieved with the floatation of the local currency up till date. Some analysts, experts have claimed that there is no empirical study that has proven that the devaluation of the naira has ever helped the country’s macroeconomic performance.
The latest trend in the local bourse suggest near corporate distress as big companies continue to face multiple problems since mid last year due to unintended consequence of a not well-thought-out FX policy.
Except banks, all other industries are facing negative effects on the naira float on their numbers. The devaluation also raised inflation temperature to above normal, cross multiyear level to settle above 34% in June.
The authority has, however, adjusted the Finance Act to charge a 70% windfall tax on FX gains reported by banks backed, from January, 2023. The move was to reduce the local lenders FX benefits from the policy
Full details report to be released MTN Nigeria Net Loss Spikes by 507% to N519bn
