Nigeria’s economic situation seems to be taking a toll on the earnings of Nigerian companies in the first quarter of 2023.
According to reports by the Nigerian Stock Exchange, many companies have reported a decline in earnings in the first three months of the year, with some attributing the decline to cash crunch and uncertainty concerning the incoming administration.
The report showed that out of the 19 companies that have released their Q1 2023 results, only seven recorded an increase in earnings while 12 reported a decline in earnings. This is a significant drop compared to Q1 2022, where 14 companies reported an increase in earnings and only five reported a decline.
Many companies have cited the cash crunch as a significant factor affecting their earnings, with some claiming that they have not been able to access loans from banks due to the current economic situation. Others claim that the cost of running their businesses has increased due to inflation, which has affected their bottom line.
One company that has reported a decline in earnings is Dangote Cement, Nigeria’s largest cement manufacturer. In a statement released by the company, it attributed the decline to the cash crunch and increased costs of running its business.
However, Dangote Cement expressed optimism that the situation would improve in the coming months.
Another company that has reported a decline in earnings is MTN Nigeria, the country’s largest telecommunications company.
In a statement, the company cited the cash crunch as the primary reason for the decline in earnings. They also mentioned that the uncertainty that surrounded the just concluded general elections had affected their business activities.
The decline in earnings is not limited to the private sector as the report also showed that some government-owned companies have also recorded a decline in earnings.
For example, the Nigerian National Petroleum Corporation (NNPC) reported a decline in profits in Q1 2023, which they attributed to the fall in crude oil prices.