The minister in charge of tech should be making visits to these companies. Also, the one in charge of investment should also make visits. The numbers I am seeing out of corporate Nigeria (excluding banking) are unprecedented in forms and scales:
“The company disclosed a pre-tax loss of N177.8 billion, in stark contrast to the pre-tax profit of N518.8 billion recorded the previous year. With this report, MTN noted that it grapples with a staggering N740 billion in forex losses, resulting in a complete depletion of shareholders’ funds. Profits fell 139% leading to negative earnings per share of -N6.38.”
During my MBA in University of Calabar (thanks Diamond Bank for that gift), one of my professors attacked Mobil Producing Nigeria Unlimited. The professor was offended by that “unlimited” because he felt it was pure arrogance. Yes, how can you structure a company for shareholders to have unlimited liability because you want to have unlimited share capital with boys in the creeks watching?
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Remembering that, it turns out that your environment can become an unbounded and unconstrained liability to the extent that you can be brilliant and still look like an “ofeke” (feeble, poor, weak) with no value as a business. Corporate Nigeria’s liability right now is the business environment, and not really what the companies are doing. That is scary! May leaders bring calm in the market, urgently.
It seems PZ Cussons has recorded a net asset position for the first time in 125 years. The company went from a half-year N7.6 billion profit to N74 billion loss (read the letter here). If Nigeria does not stop this trajectory, our economy could collapse by Q2 2025. Note that by the end of this quarter, some manufacturers could experience more than 2X in losses with a Q3 2023 starting benchmark, and if that continues, many companies will close shops.
Already, Nigerian Breweries has recorded its worst loss since 1946: “Nigeria’s largest beer maker Nigerian Breweries posted N145.3 billion in pre-tax loss for last year, its biggest since opening shop in the country in 1946.”
On MTN Nigeria, it will be fine. But watch out for your neighbour because this result will CHANGE many things over the next 12 months.
The minister in charge of tech should be making visits to these companies. Also, the one in charge of investment should also make visits. The numbers I am seeing out of corporate Nigeria (excluding banking) are unprecedented in forms and scales:
"The company disclosed a pre-tax… pic.twitter.com/0I1pnpI8sh
— Ndubuisi Ekekwe (@ndekekwe) March 1, 2024
Comment on Feed: Ndubuisi Ekekwe if the federal Government reversed the dollar floating while subsidy on fuel is not overturned, can it have at least an optimal effect on the performance of this top Nigerian firm?
My Response: Partially – it will have an optimal effect because MTN and others could recalibrate with the new exchange rate. But on the fuel subsidy, if you keep it, Nigeria will not get out of this paralysis because nearly every country subsidizes energy for companies. Nigerian firms cannot be competitive without that. My proposal is this: eliminate the corruption in fuel subsidy OR at least keep subsidy for industries in Nigeria. Nigerians like to shout how Dangote cement is cheaper in Ethiopia, etc without knowing that the company’s energy is subsidized by the government.
Forex Crisis: MTN Nigeria Faces N740 billion in forex Losses, Wiping Out Shareholders’ funds
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