Global currency swings were responsible for deep cuts into the revenues of US-listed multinational corporations, costing them more than US$21bn in the past quarter, according to the Kyriba Currency Impact Report (CIR), a report that details the impact of foreign exchange (FX) among 1,200 companies in North America and Europe. This is the third consecutive quarter of US$20bn+ in losses for North American companies the longest such stretch in at least a decade.
“Currency volatility is having real, quantifiable consequences for companies," said Wolfgang Koester, chief evangelist for Kyriba. "CFOs who dismissed this problem as a temporary wave of market drama need to reconsider their approach. They need to adopt modern tools to measure, monitor and manage their currency exposures accurately and in real-time, or risk facing more quarters of substantial losses.”
The CIR details 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% of their revenue coming from other nations.
For the tenth consecutive quarter, North American companies indicated the euro as the most impactful currency, with 44% of companies mentioning it during their second-quarter earnings calls, according to the report. Medical equipment and supplies and the business services industries experienced the greatest impact from currencies, as those industries continue to be affected by Brexit and other volatile geopolitical events around the globe.
In Europe, currency impacts are still a billion dollar problem. Publicly traded European companies monitored in the Q2 2019 report indicated a collective currency loss of US$1.55bn, the eighth consecutive quarter of US$1bn impacts. The euro topped the list as the currency most mentioned as impactful by European companies during Q2 2019 earnings calls, closely followed by the US dollar, Chinese yuan and Brazilian real.
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