FMCGs’ profits up 182% in 9 months
Fast Moving Consumer Goods Firms (FMCGs) in Africa’s most populous nation have recorded profit growth amid a tough and volatile macroeconomic environment.
A price increase implemented by firms through the half year of 2017 after the devaluation of the currency help jerk up sales as they passed on rising costs to the final consumers.
The cumulative net income of 13 consumer goods firm that have released third quarter financial results on the floor the bourse spiked by 182 percent to N100.82 billion in September 2017 from N36.64 percent as at September 2016.
Unilever Nigeria Plc, Cadbury Nigeria Plc, Nestle Nigeria Plc, Seven Up Nigeria Plc, Flour Mills Nigeria Plc, Nigeria Breweries Nigeria Plc, Guinness Nigeria Plc, International Breweries Nigeria Plc, Honeywell Nigeria Plc, PZ Cussons Nigeria Plc, Dangote Sugar Nigeria Plc, Dangote Flour Mills Nigeria Plc and Nascon Nigeria Plc.
Analysts say the introduction of the Investors’ and Exporters’ (I and E) window by the central bank in June 2017 which resulted in increased dollar supply eased the pains of firms.
The combination of a rebound in oil production and monetary policies are responsible for the country existing a recession.
The economy expanded by 0.55 percent and 1.40 percent in the first and second quarter of 2017, according to a recent report by the National Bureau of Statistics (NBS).
Nigeria’s foreign exchange reserves stood at $37.92 billion as of Dec. 22, up 10.1 percent from a month earlier, central bank data showed on Friday.
Experts are of the view that consumer goods firms could benefit from federal government copious investment in infrastructure as such capital spend are expected to spur consumer.
Nigerian President Muhammadu Buhari has presented a record N8.6 trillion budget for 2018 to the National Assembly.
However, a delay in the passage of the budget due demand in extra spending by legislators could undermine economic growth.
Also, an incessant fuel scarcity could undermine the purchasing power of consumers as they will have to pay more for transport fares.
While inflation has fallen to 15.90 percent in October, from 15.91 in the month of October, it is still below the central bank’s target range of between 6 percent and 9 percent.
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