Unilever Nigeria Plc has reported a significant foreign exchange revaluation gain of N1.17 billion in the first quarter of 2024, as per its unaudited financial results published on the NGX.
This marks a notable turnaround from the corresponding period in 2023 when the company recorded a foreign exchange revaluation loss of N458.29 million. The contrasting results reflect the volatility witnessed in the Nigerian foreign exchange market, with the naira depreciating by 184.34% over one year.
The depreciation of the naira, from N460.35/$1 in Q1 2023 to N1309/$1 as of March 31, 2024, has had profound implications for companies operating in Nigeria, including Unilever. The unification of the foreign exchange market by the Central Bank of Nigeria (CBN) in June 2023, coupled with subsequent devaluations, resulted in significant foreign exchange losses for firms with exposure to foreign currency-denominated loans.
Despite the challenges posed by naira volatility, Unilever Nigeria reported revenue of N32.31 billion in Q1 2024, accompanied by a profit-before-tax of N4.35 billion. While this represents a marginal decline from the previous year’s figure of N4.49 billion, the company’s prudent management is evident in its ability to navigate the turbulent economic environment.
Unilever’s reversal of foreign exchange revaluation losses in Q1 2024 has been noted as a positive indication amidst broader economic challenges. The company’s proactive measures and resilience are said to be underscored by its ability to mitigate the impact of currency fluctuations and sustain profitability.
Additionally, the increase in profit after tax to N3.35 billion, compared to N2.67 billion in the same period of 2023, reflects Unilever’s commitment to delivering value to its shareholders amidst evolving market conditions.
Access Holdings Receives Shareholders’ Approval to Raise $1.5 Billion for Recapitalization.
Meanwhile, Access Holdings has obtained shareholders’ consent to raise $1.5 billion from local and international capital markets as part of its recapitalization strategy.
The decision was made during the company’s annual general meeting (AGM) held in Lagos on April 19. This move aligns with the Central Bank of Nigeria’s (CBN) recent announcement of increased minimum capital requirements for financial institutions, prompting Access Holdings to bolster its capital base to meet regulatory standards.
Access Holdings plans to raise the capital through various methods, including public offerings, private placements, rights issues, and book-building processes. The company aims to issue ordinary shares, preference shares, alternative tier one, convertible and/or non-convertible notes, bonds, or other instruments to bolster its financial position.
At the AGM, shareholders voted in favor of increasing the company’s issued share capital from N17,772,612,811.00 to N26,658,919,216.50 ordinary shares. This decision reflects their support for Access Holdings’ recapitalization efforts in response to the regulatory requirements set forth by the CBN.
The CBN’s announcement on March 28 mandated financial institutions to enhance their minimum capital requirements within 24 months.
Commercial banks with international licenses are now required to maintain a capital base of N500 billion, while national and regional financial institutions must have capital bases of N200 billion and N50 billion, respectively.
The regulatory adjustment aims to bolster banks’ resilience, solvency, and capacity to support Nigeria’s economic growth amidst prevailing macroeconomic challenges and external shocks.
