Listed companies in Nigeria face tough times as free cash flow declines

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Nigeria’s largest listed companies saw their net cash flow from operating activities reduced to N577.95 billion in March 2022 due to the economic downturn in the country.

This represents a decline of 29.98% from net cash flow of N825.52 billion in March 2021.

A breakdown of the cash position by sector shows that the cumulative net cash flow from operations of the largest consumer goods companies was reduced by 75.04% to 51.12 billion naira in March 2022, from 204, 84 billion naira the previous year.

Laggards were Nestlé Nigeria, Four Mills, Nigerian Breweries and Honeywell, which posted negative net cash flow from operations of N10.01 billion, N28.89 billion, Nigerian Breweries, N3.90 billion and N553.03 million, respectively.

The industry average cash margin narrowed to 12.18% during the reporting period, from 21.91% a year earlier.

The dominant players in the cement sector: BUA Cement and Lafarge Africa saw their combined net cash flow fall by 32.64% to N248.60 billion in March 2022.

Meanwhile, the Manufacturers Association of Nigeria (MAN) has expressed concern over the recent astronomical increase in the price of diesel, noting that it portends negative consequences for the manufacturing sector and the economy as a whole.

MAN, in a statement signed by its Managing Director of MAN, Segun Ajayi-Kadir, called on the federal government to issue its members licenses to import diesel from the Republic of Niger and Chad to avoid the monumental avoidable paralysis manufacturing activities that could result from the total shutdown of production operations.

Ajayi-Kadir pointed out that Nigerian manufacturers are worried about the implications of the more than 200% increase in the price of diesel on the Nigerian economy and the manufacturing sector.

Apart from the high cost of energy which had been necessitated by the epileptic power supply and the sharp increase in the cost of diesel, the manufacturing sector had faced the challenges of scarcity of foreign exchange, high cost of production feeds and of the decline in sales. caused by the decline in disposable income, among others.

Meanwhile, investment in the Nigerian capital market tumbled last week, with investors trading 822.404 million shares worth N10.366 billion in 20,643 trades in five days.

This is lower than the previous week’s turnover of 1.348 billion shares valued at 24.487 billion naira which traded last week in 22,155 transactions.

The financial services industry, the conglomerate industry and the consumer goods industry were the best performing sectors after five days of trading based on traded volumes.

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