Kyriba report divulges US$11.98 billion in total impacts to earnings from currency volatility

KUALA LUMPUR, Feb 10 -- Kyriba’s Currency Impact Report (CIR), a comprehensive quarterly report which details the impacts of foreign exchange (FX) exposures among 1,200 multinational companies based in North America and Europe, reveals US$11.98 billion in total impacts to earnings from currency volatility. (US$1 = RM4.184)

The combined pool of corporations reported US$9.86 billion in tailwinds and US$2.13 billion in headwinds in the third quarter of 2021.

North American companies experienced greater tailwinds than their European counterparts, reporting US$9.32 billion in FX-related positive impacts — a decrease of 145 per cent from the previous quarter. By comparison, European corporations reported US$541 million in positive currency impacts — a decrease of 20 per cent from the previous quarter.

“Headwinds and tailwinds combine to reveal the vulnerability North American and European multinational corporations’ revenues and earnings per share have to currency movements.

“As the era of low interest rates and, potentially, the strong US Dollar concludes, these quantified impacts are a troubling warning sign as this next environment will become more challenging for CFOs to achieve the industry standard MBO of less than US$0.01 EPS impact and protect their balance sheets and income statements from currency volatility,” said Kyriba Chief Evangelist Wolfgang Koester in a statement.

“CFOs have a long way to go to mitigate risk and include substantial currency gains as part of their earnings revenue.”

Highlights from the January 2022 Kyriba Currency Impact Report include, average earnings per share (EPS) impact from currency volatility reported by North American companies in Q3 2021 went up to US$0.04 — four 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 Q3 2021 CIR reported a combined US$9.32 billion in positive currency impacts, and US$929 million in negative currency impacts.

San Diego-headquartered Kyriba manages more than 1.3 billion bank transactions per year, and 250 million payments for a total value of US$15 Trillion annually.

For more information, visit www.kyriba.com.

-- BERNAMA