As inflation continues to bite, some of the biggest Nigerian companies listed on the Nigerian Stock Exchange are reaping unprecedented profits.
According to a Nairametrics report, the COMART Group, which consists of bluechip Nigerian companies in construction, oil and gas, manufacturing (including FMCGs), agriculture, real estate, and technology, generated over N2.3 trillion in sales in the first quarter of this year.
Banks and other non-bank financial institutions are not included in this data.
As businesses respond to increasing prices and exchange issues in the first quarter of the year, revenues have increased by 30% year over year.
The figures contrast sharply with the experience of ordinary Nigerians, who have had to contend with growing prices of products and services.
In Q1 2022, the top Nigerian companies recorded revenue of N2.348 trillion, up from N1.8 trillion in Q1 2021, a 30 percent increase of N548.8 billion.
Apart from revenues, the enterprises’ operating profit margins increased significantly throughout the time under examination, indicating that they were nonetheless profitable despite the rising operating costs.
The cost of sales for the enterprises under our scrutiny increased from N1.06 trillion to almost N1.3 trillion, showing a 25% increase in cost well ahead of the 15% inflation rate.
The direct cost of sourcing raw material inputs, direct labour cost, clearing, and forwarding are all included in the cost of sales.
Imported inflation and the impact of currency scarcity contributed to some of the cost rises.
Local equivalents are also slightly more expensive, prompting COMART to factor in higher sales costs.
Other operating expenses, such as marketing and administrative costs, increased by 44 percent to N205 billion as a result of rising energy prices, exchange rate pass-through, and labour costs.
Diesel prices have risen in Nigeria, and fuel scarcity has hampered corporate operations across the country.