In June 2023, Nigeria’s decision to float the naira marked a significant shift in its foreign exchange framework.

This led to a sharp and sustained depreciation of the local currency, as the naira fell from around N460/$ in June 2023 to N1,535/$ by the end of 2024.

The devaluation caused major FX translation losses and increased interest obligations for Nigerian firms, reducing shareholder value across the Nigerian Exchange.

Companies in the consumer goods and ICT sectors, particularly reliant on imported inputs or foreign-denominated debt, were hit hardest.

By late 2024, however, the foreign exchange market began to show signs of stability.

By Q1 2025, the naira traded within a more stable band. Better FX liquidity, stronger pricing strategies, and cost reductions helped many firms return to profitability.

Consumer goods sector:

By the close of 2024, seven listed consumer goods firms — BUA Foods, Cadbury Nigeria, International Breweries, Nigerian Breweries, NASCON Allied Industries, Dangote Sugar, and Nestlé Nigeria — posted a combined pre-tax loss of N507.57 billion, compared to N359 billion in 2023.

Over two years, these firms lost N867 billion, largely due to FX exposure and soaring interest costs.

Only BUA Foods and NASCON remained profitable over the period.

FX losses surged 56% to N1 trillion in 2024, up from N710 billion in 2023.

Finance costs more than doubled to N365 billion in 2024 from N158 billion the previous year.

The telecoms and ICT sector also suffered.

MTN Nigeria posted a pre-tax loss of N550 billion in 2024, following a N178 billion loss in 2023.

MTN attributed its performance to the steep naira depreciation, which heavily impacted foreign obligations, including tower leases and infrastructure contracts.

According to CEO Karl Toriola, “In the foreign exchange market, the naira depreciated to N1,535/US$ by the end of 2024 (from N907.1/US$ on 31 December 2023), as businesses and consumers continued to grapple with escalating costs. These headwinds significantly impacted MTN Nigeria’s costs, particularly those related to tower leases and other foreign currency obligations.”

Between 2023 and 2024:

MTN Nigeria recorded N1.67 trillion in FX losses, with N926 billion in 2024.

Finance costs rose to N433 billion in 2024, totaling N669 billion over two years.

Cumulative losses reached N607 billion, resulting in a negative net worth of N458 billion by the end of 2024.

The turnaround

By Q4 2024, the naira began to stabilize, FX volatility declined, and market liquidity improved.

Companies adjusted their cost base, improved pricing, and restructured foreign debt — laying the groundwork for recovery.

By Q1 2025, results began to improve.

Consumer goods sector rebounds

After almost two years of losses, the sector returned to profitability in Q1 2025.

The seven companies reversed a combined N418 billion Q1 2024 loss to a pre-tax profit of N289.8 billion in Q1 2025.

Only Dangote Sugar remained unprofitable, reporting a N23 billion loss — a marked improvement from the N121 billion loss in Q1 2024.

The rest — BUA Foods, Nestlé, NASCON, Nigerian Breweries, Cadbury, and International Breweries — returned to profit through FX gains, lower finance costs, and operational efficiency.

FX losses shifted to a N2.511 billion gain in Q1 2025 from a N423 billion loss in Q1 2024.

Interest expenses dropped to N94 billion from N170.1 billion year-on-year.

MTN Nigeria’s recovery continues

MTN Nigeria extended its profitability into Q1 2025, after recovering in Q4 2024.

The company posted a pre-tax profit of N202.6 billion in Q1 2025, compared to a loss of N575.7 billion in Q1 2024.

The return to profit was driven by:

FX losses reduced to N5.25 billion from N656 billion.

Slower growth in finance costs.

Tariff increases.

Growth in data and fintech revenue.

By Q2 2025, all seven consumer goods firms were back in profit with a combined pre-tax gain of around N264 billion.

FX losses dropped to just N896 million.

Dangote Sugar’s FX loss fell to N160 million from N208.903 billion the previous year.

MTN Nigeria reported a pre-tax profit of N419.6 billion in Q2 2025, bringing H1 2025 profit to N622.26 billion. This reduced its retained losses to N192.889 billion and raised shareholders’ funds to N42 billion, up from a negative N458 billion at end-2024.

MTN may be one profitable quarter away from reversing two years of retained losses due to naira devaluation.

This earnings turnaround shows how currency stability and disciplined cost control can rapidly revive companies affected by macroeconomic shocks.

Capital markets respond

Investor sentiment improved, and MTN Nigeria became the most valuable company on the NGX as of July 2025.

MTN’s share price rose to N480, pushing its market capitalization to N10.1 trillion.

In the consumer goods sector, Nigerian Breweries and International Breweries joined the billion-dollar club alongside Airtel Africa, Dangote Cement, BUA Foods, Seplat Energy, Geregu Power, Aradel Holdings, BUA Cement, Transcorp Power, GTCO, and Zenith Bank.

Cadbury also emerged as one of NGX’s top performers in July 2025, reflecting renewed investor confidence.

Credit: Nairametrics