Januari 2009, nieuwe FrieslandCampina-vlag bij kantoor Zaltbommel
© De Beeldkuil / marcel bekken
FrieslandCampina WAMCO records net loss in Q1 due to forex crunch
By Felicia Nwosu
FrieslandCampina WAMCO Nigeria has reported that for the three months under review, it posted a slight drop in revenue to N81.9 billion, as cost of sales contracted by 6 percent. However, selling and distribution costs accelerated by one-fifth to almost N7 billion.
The quarterly loss incurred at the beginning of the year was basically attributed to the foreign exchange crunch impacting negatively on the financial outlook of the dairy giant. Being heavily dependent on importation for its production, the company incurred a record net loss of N10.3 billion for the first quarter of the year.
The loss was recorded after the company partially settled accrued foreign currency-denominated obligations to trade partners which Nigeria’s foreign exchange scarcity has blown out of proportion in recent years. That compares with a net profit of N2.9 billion reported for the same period last year.
The company also revealed in its earnings report that a backlog of past dues reaching back to 2020, was not repaid as it couldn’t source enough forex, triggering “an exceptional” foreign currency expense of N14.1b. It noted that this added to higher interest costs at N4 billion which had the most squeeze on its bottom-line for the period.
Meanwhile, Royal FrieslandCampina NV, the parent company, showed an exchange rate loss of €63 million (N30.9 billion at N490.4/€1) in its Nigerian operation in its 2022 financial statement. The company trades its shares over the counter at Lagos NASD OTC Securities Exchange, where they are quoted at N71.50 per unit and a market capitalisation of N139.6 billion at market close.
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