Kayode Tokede
Following double digit inflation and the exchange rate between the naira and U.S dollars, 12 companies listed on the Nigeria Exchange Limited (NGX), recorded spike in cost of sales and operating expenses (OPEX) to N10.14 trillion in the first half (H1) ended June 30, 2026.
The increase is about 16.9 per cent increase over the N8.67 trillion cost of sales and operating expenses reported in the same period in 2025.
Analysis of their unaudited result and accounts showed that the 12 companies cost of sales stood at N7.67 trillion in H1, about 16.96 per cent increase over N6.6 trillion in H1 2025.
Also, operating expenses moved to N2.47 trillion in H1 2026, from N2.2 trillion in 2025.
The 12 companies’ growth in cost of sales and OPEX is higher than the 15.91 per cent June 2026 inflation figure released by National Bureau of Statistics (NBS).
However, the naira was stronger and relatively more stable during the period, closing at N1,380 against the dollar at the end of H1 2026 when compared to N1,530 against the dollar June 30, 2025.
Although these companies were able to drive revenue in H1 2025, their cost of sales and operating expenses slowed profit before tax that closed at N4.95 trillion as against N2.84 trillion reported in 2025.
Aside from inflationary pressure, and value of Naira at the foreign exchange market, other key factors that contributed to these companies’ cost of sales and OPEX include high cost of power, transportation of goods & services, materials cost, among others.
The prolonged Russia/ Ukraine, USA-Israel/Iran war have induced strain in the global supply chain and has continued to cause an increase in the cost of raw materials for manufacturers, particularly as both countries rank among the top 10 producers of wheat.
Further analysis of unaudited result and accounts showed that Oando Plc, followed by Seplat Energy Plc, Dangote Cement Plc and MTN Nigeria Communications Plc recorded the highest of cost of sales and OPEX.
Oando declared N1.96 trillion cost of sales, about 15.6 per cent increase over N1.7 trillion in 2025, while its administrative expenses stood at N77.8 billion, a drop of 4.5 per cent from N81.4 billion reported in H1 2025.
Eventually, the indigenous oil & gas company closed H1 2026 with N32.84 billion loss before tax as against N145.74 billion loss before tax declared in H1 2025.
On its part, Seplat Energy reported N1.38 trillion cost of sales in H1, a drop of 2.47 per cent from N1.42 trillion in H1 2025, its OPEX also dropped to N166.36 billion or 21 per cent from N209.44 billion in 2025
Dangote Cement in the period under review declared N924.31billion cost of sales, about 8.3 per cent increase over N853.6billion reported in the corresponding period of 2025. The cement maker declared N540.5billion OPEX during the period, which is about 21.2 per cent increase over N445.67 billion reported in 2025.
Analysts blame the hike in cost of sales and OPEX on inflation, among others, stressing that it impact affected not only their robust profit generation, but dividend payout at the end of the year.
They predicted further hike in these companies’ OPEX post election, stressing that it may cut down on earnings and dividend payout to shareholders.
Speaking, the Vice President, Highcap Securities Limited, Mr. David Adnori said the hike cost of sales and operating expenses is a reflection of global economic unrest, stressing that financial institutions operating in Nigeria and in Africa do not operate in isolation.
He expressed that the growth in cost of sales and operating expenses as reported by the listed companies would definitely have an impact on profit and dividend payout to shareholders.
He said, “The world is currently facing a high inflation rate and Nigeria, Africa at large are not exempted from this experience, with countries on the continent witnessing record high inflation rate. The surge in inflation rate is following the rally in crude oil prices, amidst the face-off between Russia-IUkraine andUSA-Israel/ Iran, among other nations.”
“Reacting to the surging inflation rate, regulators in several countries have also raised their interest rates to curb the rising cost of goods and services. However, this is yet to yield any significant positive as the inflation rate above 30 per cent. With cost impacted, Nigerian companies may suffer slow profitability this year and it might impact on dividend payout,” he added.