Dangote Declares Naira Depreciation Biggest Challenge In 2023

Dangote Declares Naira Depreciation Biggest Challenge In 2023
Alhaji Aliko Dangote

The President of Dangote Industries Limited, Aliko Dangote, has said that the depreciation of the local currency was the company’s biggest challenge in 2023.

He stated this on Tuesday during his remarks at the Annual General Meeting of Dangote Sugar Refinery Plc.

According to Dangote, the domestic operating environment was harsh, being an election year that saw a new government sworn into office on May 29, 2023.

The business mogul also noted that many manufacturing companies were affected and reported operational losses arising from fluctuations in the value of the naira against the US dollar.

He said, “The biggest mess created was the devaluation of the naira from N460 to N1,400. You can see that almost 97 per cent of companies in the food and beverage business, none of them will pay dividends this year. But we will try and get out of it.”

Media had reported that Dangote Group, Nestle Nigeria and MTN Nigeria, along four of Nigeria’s most capitalised companies, lost N1.7tn to the depreciation of the naira in 2023.

According to an analysis of their financial statements published on the website of the Nigerian Exchange Group, the listed firms incurred significant losses in the 2023 financial year, largely due to forex-related losses.

Nigeria’s largest conglomerate, Dangote Industries, said in its 2023 financial statement that it incurred N164bn FX loss in 2023.

The conglomerate said the loss was primarily due to its operations in other countries.

Giving a breakdown of the 2023 financial year, Dangote said the company recorded a group turnover of N441.5bn, a 9.5 per cent increase over N403bn in the corresponding period in 2022.

He further stated that the operating profit of N72.69bn, which was 16.5 per cent of revenue compared to N82.41bn (20.4 per cent of revenue), showed a strong attempt by the company to recover cost increases.

Pre-tax loss was N108.9bn, while post-tax loss stood at N73.8bn, incurred due to the N171.4bn non-cash foreign exchange loss it suffered during this period.

Excluding the non-cash foreign exchange loss, recurring PAT was up 78 per cent to N97.66bn.

Resolutions reached at the AGM included the ratification of Mariya Dangote as a director of the company as well as the trio of Benedickter Molokwu, Maryam Bashir and Prof Konyisola Ajayi as retiring directors.

Shareholders also voted to authorise the directors to fix the remuneration of the auditor and to disclose the remuneration of the managers.

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