PZ Cussons Nigeria records N96.4bn losses, shareholders’ value wiped out
By Ralph Tathagata
PZ Cussons Nigeria has recorded a net loss of N96.4 billion for the fiscal year ending 31 May, 2024. The losses led the company to post a negative equity of N47.2 billion at the end of the fiscal year, which threatens shareholders’ fund.
The report is contained in the company’s latest unaudited financial statements.
It would be recalled that in March this year, PZ Cussons Holding said it would review its Nigerian operations in order to “reduce risk and maximize shareholders’ value.”
The company has been grappling with macroeconomic crisis occasioned by high interest rates, exchange rate depreciation and galloping inflation. PZ Cussons Nigeria experienced a substantial exchange loss of N158 billion, resulting in a negative operating margin. Consequently, the group reported an operating loss of N111.5 billion.
However, it posted a revenue of N152.2 billion during the fiscal year, representing a 33.5% growth from the N114 billion revenue generated in the previous fiscal year.
The company also reported a gross profit of N60.6 billion, representing an 84% increase from the N32.95 billion gross profit posted in the previous fiscal year.
The report revealed that PZ Cussons Nigeria’s borrowings from its parent company, PZ Cussons (Holding) Limited, surged 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.
This increase is attributed to a $40.26 million non-interest loan facility extended by the parent company to the Nigerian subsidiary in June 2022.
The FX revaluation adjustment resulted in an additional N41.1 billion increase to the original borrowed amount.
In March this year, Bloomberg reported that PZ Cussons, a British multinational, indicated plans that it may leave Africa after sales plunged in its Nigeria operation. In Nigeria, the company sells a range of products, including Morning Fresh dishwashing liquid, refrigerators and cooking oil. However, the devaluation of the naira, volatile and skyrocketing FX among other economic headwinds are forcing many multinationals out of the country as consumer purchasing power dwindles to a mere trickle.
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