Nigeria’s biggest firms reap N2.47trn as FX relief power earnings

Nigeria’s largest publicly listed firms delivered a strong financial performance in the first half of 2025, driven by easing foreign exchange (FX) losses, sustained consumer demand, and internal cost restructuring, helping to reverse the brutal losses many endured a year ago.

An analysis of half-year financial results from 20 of the top 30 firms on the Nigerian Exchange Group (NGX) shows a combined profit of N2.47 trillion, more than doubling the N1.15 trillion earned in the same period of 2024.

The rebound comes as companies benefit from relative stability in the FX market and better macroeconomic indicators.

The surveyed firms include MTN, Dangote Cement, BUA Foods, BUA Cement, Geregu Power, Lafarge Africa, Transcorp Power, Nigerian Breweries, International Breweries, Presco Plc, Transcorp Hotel, Nestle Nigeria, Okomu Oil, Oando, Dangote Sugar Refinery, Transnational Corporation Plc, United Capital, Wema Bank, FCMB Group, and First HoldCo.

Many of these companies were heavily impacted in 2023 by the sharp devaluation of the naira following the Central Bank of Nigeria’s decision to collapse the multiple FX windows and adopt a market-determined exchange rate regime.

The transition, which aimed to unify the naira’s official and parallel market rates, caused the local currency to depreciate steeply from N461.5/USD at the beginning of 2023 to nearly N1,534/USD by the end of July 2025.

But with the naira showing more signs of stability in recent months, BusinessDay reported that the naira depreciated slightly by 0.3 percent against the dollar at the official foreign exchange (FX) market in July, even as Nigeria’s external reserves rose by $2.16 billion, reflecting improved FX inflows and continued market stability.

The local currency, which opened at N1,529.57 per dollar on July 1, 2025, closed the month at N1,533.55 on Thursday, losing N3.98 over the 31-day period, according to data published by the apex bank.

Companies that posted massive FX losses during the transition, but as stability returned, firms with dollar receivers saw foreign‑exchange gains.

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Dangote Cement, BUA Foods see FX gains…

According to BusinessDay’s analysis, nine of the surveyed firms, which include Dangote Cement, BUA Foods, BUA Cement, Lafarge Africa, Nigerian Breweries, and Nestlé Nigeria, reported a rebound in their FX to a N69.2 billion gain from the N953 billion losses made in the same period of last year.

While firms like MTN, which reported the highest FX losses in six months of last year, reaching N887 billion, plummeted to N5 billion in H1 of this year.

Other companies, which include Geregu Power, Dangote Sugar, and Transcorp Hotel, had FX losses collectively ease in six months to N214 million from N198 billion in the same period of last year.

“The improvement in FX conditions has brought a degree of relief to our cost structure,” said a senior executive at a major FMCG company, speaking anonymously. “While challenges remain, especially with access to dollars, the reduction in valuation losses on our dollar-denominated liabilities is significant.”

Analysts are cautiously optimistic. In its H2 2025 outlook, Comercio Partners projected a relatively stable exchange rate environment, with the Central Bank expected to continue interventions to defend the naira.

“This exchange rate stability will offer relief to companies with foreign-denominated obligations, as it removes a significant layer of uncertainty from financial forecasting,” the firm said.

Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), said, “The worst of the FX-driven losses for corporates might be behind us if current trends persist.”

He said the return of some measure of predictability in the FX market “is a positive development for balance sheet planning and foreign investor sentiment.”

However, companies warn that risks remain. Persistent inflation, high interest rates, and sporadic dollar supply are ongoing concerns, especially for businesses that rely heavily on imported raw materials and equipment.

Inflation in Nigeria slowed for the third consecutive month in June, with consumer prices rising year-on-year to 22.22 percent, data from the National Bureau of Statistics (NBS) disclosed.

Analysts at CSL Stockbrokers disclosed in a note that while headline inflation declined for the third consecutive month, underlying inflationary pressures persist, with the monthly inflation rate still holding well above the 1.0 percent level.

“In our view, the moderation in headline inflation was partly influenced by a ‘downward statistical bias’ introduced by the recent CPI rebasing, an effect we have previously flagged and one we expect to continue supporting the disinflationary trend through the rest of the year.”

“Furthermore, the appreciation of the Naira, combined with the decline in energy prices, partly due to price cuts by Dangote Refinery, also played a role in easing inflationary pressures in June,” the report stated.

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Nigeria’s economic growth seen boosting bottom line

According to NBS, Nigeria’s Gross Domestic Product (GDP) grew by 3.13 percent (year-on-year) in real terms in the first quarter of 2025.

This growth rate is higher than the 2.27 percent recorded in the first quarter of 2024.

However, the International Monetary Fund (IMF) retained its position on its projection of a 3.4 percent expansion in the country’s real GDP for 2025 despite the change in methodology by the country’s bureau of statistics.

The growth in the economy’s GDP is reflecting in the third quarter as the Nigerian private sector recorded its fastest expansions in output and new orders, as well as a notable easing in inflationary pressures, according to the latest monthly Stanbic IBTC Purchasing Managers’ Index (PMI) report.

The headline PMI rose to 54.0 in July, up from 51.6 in June, marking a three-month high and signaling a “solid monthly improvement in the health of the private sector.”

“Sharp and accelerated expansions in output and new orders were recorded in July,” the report noted. “In both cases, the increases were the fastest in three months. Panelists reported improving customer demand, in some cases due to softening inflationary pressures. The launch of new products was also a factor supporting growth.”