PZ Cussons Nigeria declares N96.44bn loss in Q4 2024

Leading fast-moving consumer goods company, PZ Cussons Nigeria has reported N96.44billion loss in fourth quarter (Q4 2024) ended May 31 2024 from N14.35 billion reported in fourth quarter (Q4 2023 ) ended May 31, 2023.

The household company also reported loss before tax of N108.97 billion in Q4 2024 from N20.46billion profit before tax posted in Q4 2023.

About of N158 billion foreign exchange loss, according to its report resulted in a negative operating margin.

An exchange gain or loss is caused by a change in the exchange rate between when an invoice was issued and when it was paid. The steep exchange rate depreciation in the past year was responsible for the exchange loss.

The losses led the company to post a negative equity of N47.2 billion at the end of the fiscal year. Consequently, the group reported an operating loss of N111.5 billion.

As a result of these losses, the company enjoyed a tax credit of N12.5 billion, resulting in a net loss of N96.4 billion.

Also, from the results, the company declared a gross profit of N60.6 billion for the fiscal year ending May 31, 2024. This figure represents an 84per cent increase from the N32.95 billion gross profit the company posted in the previous fiscal year.

PZ Cussons Nigeria also posted a revenue of N152.2 billion during the fiscal year under review, representing a 33.5% growth from the N114 billion revenue it generated in the previous fiscal year. This meant that its cost of sales for the fiscal year was N91.6 billion, a 13per cent year-on-year increase.

The key highlights of the unaudited financial statement of the PZ group for the fiscal year 2024 when compared to the previous fiscal year is as follows:

PZ Cussons Nigeria woes was exacerbated by a $40.26 million non-interest loan facility extended to it by the parent company, PZ Cussons (Holding) Limited in June 2022.

Due to the FX revaluation, PZ Cussons Nigeria borrowings in Naira terms spiked to N59.8 billion by the end of the 2023/2024 fiscal year, up from N18.7 billion at the close of the previous year.

In the face these operating environment, PZ Cussons Nigeria earlier made moves to delist from the NGX in September 2023 when the parent company, PZ Cussons (Holding) Limited, announced plans to buy out the 26.73% stake held by minority shareholders in its Nigerian subsidiary. An offer price of N21 per unit was made to the shareholders but was swiftly rejected by some of the shareholders.

On April 25, 2024, Jonathan Myers, chief executive officer (CEO) of PZ Cussons, said the company plans to maximise shareholder value by transforming its portfolio. He also said at the time that in the past 10 months, PZ Cussons has repatriated about £35 million of cash from Nigeria and expects to repatriate a further £15-20 million before the end of May.

“This improvement has been underpinned by fiscal policy changes in Nigeria, providing improved access to US Dollars, and by other operational initiatives enabling our Nigerian business to be self-funding,” the company said.

As at the close of trading on the NGX on Friday, the share price of PZ Cussons Nigeria was valued at N22 per unit.

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