US$9.5 BILLION IN TOTAL QUARTERLY FX HEADWINDS FOR NORTH AMERICAN, EUROPEAN MULTINATIONAL CORPORATIONS - KYRIBA REPORT

 


KUALA LUMPUR, July 14 (Bernama) -- Kyriba’s Currency Impact Report (CIR), a comprehensive quarterly report detailing the impacts of foreign exchange (FX) exposures among 1,200 multinational companies based in North America and Europe, revealed a negative impact from currency volatility of US$9.54 billion. (US$1 = RM4.198)

North American companies experienced greater headwinds than their European counterparts in the first quarter of 2021, reporting US$5.87 billion in FX-related negative impact -- a staggering increase of 322 per cent from the last quarter.

By comparison, European corporations reported US$3.67 billion in negative impact, according to a statement.

“Despite warnings that currency volatility would be on the rise, many companies were unprepared to manage FX exposures, according to the data. As businesses experience a post-pandemic surge in activity, CFOs were unable to keep up with currency movements, unnecessarily risking corporate liquidity,” said Chief Evangelist for Kyriba, Wolfgang Koester.

Highlights from the July 2021 Kyriba CIR include the average earnings per share (EPS) impact from currency volatility reported by North American companies in Q1 2021 held steady at US$0.03 — three times greater than the recommended standard of US$0.01 EPS impact.

In addition, publicly traded North American companies that qualified to be monitored in the Q1 2021 report had a collective currency loss of US$5.87 billion, while publicly traded European companies that qualified to be monitored in the Q1 2021 report had a collective currency loss of US$3.67 billion.

North American companies indicated the Chinese renminbi (CNY) as the most impactful currency, with 33 per cent of companies referencing it as most impactful, snapping the Euro’s (EUR) hold as the most impactful currency over the last two quarters.

The US dollar (USD) remained the currency most mentioned as impactful by European companies on earnings calls for the third quarter in a row, followed by the euro, with the Chinese renminbi ranking third.

All companies analysed in the report’s findings conduct business in more than one currency, with at least 15 per cent of their revenue coming from nations that are located outside of their headquarters.

More details at www.kyriba.com.

-- BERNAMA