The Calm Before The Currency Storm: Global Headwinds Cost Companies nearly $9B in FX Losses in Latest Quarter, According to N...
09 Abril 2020 - 7:00AM
Business Wire
The Company Warns CFOs and Treasurers to Better
Prepare for Increase in FX Impacts and Fraud Risk
Currency volatility was responsible for significant impacts on
the revenues of U.S.-listed multinational corporations, costing
them nearly $9 billion in Q4 2019, according to the new Kyriba
Currency Impact Report (CIR), a comprehensive report which details
the impact of foreign exchange (FX) among 1,200 companies in North
America and Europe. Despite reduced currency volatility, this is
the sixth consecutive quarter of $8 billion in losses for North
American companies – the longest such stretch in at least a decade,
according to the report.
“Companies have many challenges under normal circumstances. Nine
Billion in losses is simply too much for a quarter with reduced
currency volatility. Factor in the surging dollar at the end of the
quarter, and the impending currency war due to economic stimulus
plans and we can expect deeper problems in the coming quarter,”
said Wolfgang Koester, Chief Evangelist for Kyriba. “At a time when
every dollar is precious to multinational corporations, CFOs who
have previously dismissed currency impact as an unsolvable nuisance
will be costing their shareholders and need to reconsider their
strategy.”
According to Koester, Boards will be closely watching FX losses
of an indicator of corporate governance. He warns of increased
payments fraud risk adding to the challenge of corporate
governance.
The average earnings per share (EPS) impact reported by North
American companies in Q4 2019 was $0.03 – three times greater than
the industry standard MBO of less than $0.01 EPS impact, according
to the report. For the twelfth consecutive quarter, North American
companies indicated the Euro as the most impactful currency, with
42 percent of companies mentioning it during their Q4 earnings
calls, according to the report. According to the report, medical
equipment and supplies and the electronic equipment industries
experienced the greatest impact from currencies, as those
industries continue to be affected by Brexit and other volatile
geopolitical events around the globe.
To learn about specific industries affected and which currencies
were most impactful to multinationals, download the full Q4 2019
Kyriba Currency Impact Report here.
In Europe, Currency Impacts Are Less of a Problem
Publicly traded European companies which qualified to be
monitored in the Q4 2019 report indicated a collective currency
loss of $910 million, the second consecutive quarter of sub-$1
billion impacts. For the second consecutive quarter the currency
most mentioned as impactful by European companies during Q3 2019
earnings calls was the U.S. dollar, which topped the Euro, followed
by the Chinese Yuan, British Sterling, and Brazilian Real, as shown
in the report.
The CIR is a comprehensive report, detailing the impact of
foreign exchange exposures among publicly traded companies. In
addition, all companies in the report do business in more than one
currency, with at least 15 percent of their revenue coming from
other nations.
Kyriba is hosting a webinar to help corporate treasurers
understand how to reduce fraud risk and increase payments security
and efficiency, April 16, 2020. Register here for more
information.
About Kyriba Corp.:
Kyriba empowers CFOs and their teams to transform how they
activate liquidity as a dynamic, real-time vehicle for growth and
value creation, while also protecting against financial risk.
Kyriba’s pioneering Active Liquidity Network connects internal
applications for treasury, risk, payments and working capital, with
vital external sources such as banks, ERPs, trading platforms, and
market data providers. Based on a secure, highly scalable SaaS
platform that leverages artificial and business intelligence,
Kyriba enables thousands of companies worldwide to maximize growth
opportunities, protect against loss from fraud and financial risk,
and reduce costs through advanced automation. Kyriba is
headquartered in San Diego, with offices in New York, Paris,
London, Frankfurt, Tokyo, Dubai, Singapore, Shanghai and other
major locations. For more information, visit www.kyriba.com.
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Daniel Shaffer dshaffer@kyriba.com +1 858-263-2218