Despite the harsh economic conditions that Nigerians have been facing in the first quarter of 2022, 28 of the top companies in the Nigerian Stock exchange market operating in the manufacturing, telecommunication, oil and gas, and agricultural sectors earned the sum of N2.33 trillion in Q1 of 2022.
Driving the numbers
These numbers are an improvement of 33.2% from the first quarter of 2021 in which they recorded N1.75 trillion. Economically, these companies were challenged in Q1 of 2022 by a surge in prices of aviation fuel, 8 months high inflation rate and fuel scarcity.
- Again, the top Nigerian companies recorded an increase in profit of 38.1% or N614.25 billion in Q1 of 2022 as against the N444.89 billions of 2021.
- By earnings, MTN Nigeria leads the chart with a revenue of N470.98 billion derived mainly from voice calls followed by Dangote Cement with a revenue of N413.18 billion.
The global economy has taken a hard hit as a blowback from the war between Russia and Ukraine and the aftermath of the 2020 global pandemic. This has raised the United States and the United Kingdom’s inflation rate to a 40year high of 8.3% and 9%, respectively, and Canada’s to 6.8%, a 31year high, all for the month of April 2022.
What’s driving growth
The top Nigerian companies’ ability to thrive in these harsh economic conditions is mostly attributed to the hike in their selling prices.
- BUA Cement experienced a 66.1% and 63.7% rise in the cost of production materials and energy in the first quarter of 2022. Nonetheless, the company increased in operating profit by 62.5% as they hiked the prices of cement by 58.5% during the first quarter under review.
- Similarly, Dangote Cement, whose Q1 revenue shot up by 24.2%, experienced a 3.2% decline in sales. Dangote’s cement operating profit rose by 20.5% according to its year-on-year data.
- TotalEnergies, despite a surge in production costs, increased its operating costs by 47.6%.
What this means
The growth by the companies shows increased activities in Africa’s most populous nation economic system, thereby suggesting a slight growth in the country’s gross domestic product for Q1 2022.