FMCG firms eye sustained recovery from FX losses in H2

Fast Moving Consumer Goods (FMCGs) firms are expected to further consolidate the gains seen in the first half of 2025 in the next six months ending this year, supported by a stable FX and moderating prices.

After swimming in FX-induced losses and sky-high inflationary pressures that have eroded profitability, top consumer goods firms recorded a breakthrough in the first quarter of 2025 with analysts projecting a sustained trajectory in a full year.

“The prospect of a more stable currency in H2’25 provides welcome relief for FMCG players with significant imported input exposure,” analysts at CardinalStone Research said in its mid-year outlook titled ‘Charting the Sustainability Path’.

Read also: FMCGs trim losses but naira plunge still weighs

Five major players, Cadbury Nigeria Plc, Champion Breweries Plc, International Breweries Plc, Nestlé Nigeria Plc, and Nigerian Breweries Plc, collectively reported a combined after-tax profit of N110.9 billion, marking a sharp reversal from the N262.3 billion loss recorded in the same period of 2024.

On the revenue front, these firms reported a 65.7 percent rise to N897.6 billion from N541.6 billion.

The naira has continued to gain stability despite external shocks that have shattered emerging market currencies. The local currency is projected to remain largely range-bound in H2’25 at N1,550.00 — N1,635.00/$, supporting the optimism of the FMCGs companies.

While the naira has sustained relative stability, inflationary pressures are also easing with prices slowing for two consecutive months in May to 22.97 percent from 23.71 percent in April 2025.

“We hold a mildly optimistic outlook for the Consumer Goods sector in H2. We expect the recent improvement in FX stability and reducing inflationary pressures to support an overall positive FY’2025 bottom-line performance for industry players,” analysts at Arinvest said in its outlook report.

Read also: Five FMCG firms post turnaround profits in Q1 amid recovery hopes

Companies that have proactively strengthened their distribution networks, preserved pricing power and innovated around affordability and product relevance are now well-positioned to benefit from an improving macro backdrop, according to CardinalStone Research.

“In particular, NESTLE, UACN, NB, and UNILEVER have made substantial investments in nationwide distribution networks, giving them a strong footprint across all geopolitical zones in Nigeria.

“This reach enables these companies to maintain consistent product availability across traditional and modern retail outlets, minimising stockouts, enhancing market penetration, and serving a wide range of consumer demographics.

“Notably, the recent acquisition of Guinness Nigeria by the Tolaram Group is expected to unlock further topline growth due to the acquirer’s proven distribution and marketing infrastructure across Nigeria and other African markets.”