Leading fast-moving consumer goods company, PZ Cussons Nigeria has reported a gross profit of N60.6 billion for the fiscal year ending May 31, 2024. This figure represents an 84% 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 13% year-on-year increase.
The company however declared a net loss of N96.4 billion for the fiscal year ending May 31, 2024, according to its unaudited financial statements.
PZ also announced an exchange loss of N158 billion, which 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 osses, the company enjoyed a tax credit of N12.5 billion, resulting in a net loss of N96.4 billion.
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:
Revenue: N152.2 billion, +34% YoY
Cost of sales: N91.6 billion, +13% YoY
Gross profit: N60.6 billion, +84% YoY
Administrative expenses: N1.3 billion, -84% YoY
Exchange loss: N158 billion, +3090% YoY
Operating profit/(loss): (N111.5 billion), -1456% YoY
Net interest income: N2.2 billion, -55% YoY
(Loss)/Profit before tax: N109 billion, -632% YoY
(Loss)/Profit for the year: N96.4 billion, -772% YoY
Total assets: N137.6 billion, -17% YoY
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.
At the time, an offer price of N21 per unit was made to the minority shareholders. However, this price was rejected by certain shareholders who claimed such a price was unfair to them.
As at the close of trading on the NGX on Friday 28th June, 2024, the share price of PZ Cussons Nigeria was valued at N22 per unit.
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 in April.