PZ Cussons posts N96.4bn loss in 2024

PZ Cussons Nigeria, a consumer goods company listed on the Nigerian Exchange Limited {NGX} has reported a net loss of N96.4 billion for the year ending May 31, 2024.

According to the financial statement submitted to the NGX, on Friday, the company reported a profit after loss of N96.4 billion for the year 2024 as against the profit after tax of N14.35 recorded in 2023.

PZ Cussons Nigeria posted revenue of N152.2 billion during the fiscal year, representing a 33.5 percent 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 percent increase from the N32.95 billion gross profit posted in the previous fiscal year.

Despite achieving an impressive 40 percent gross margin during the fiscal year, the group 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.

The group posted a pre-tax loss of N109 billion, a contrast from the N20.46 billion pre-tax profit posted at the end of the 2022/2023 fiscal year.

Due to its losses, the group enjoyed a tax credit of N12.5 billion, resulting in a net loss of N96.4 billion, down from the N13.3 billion profit after tax posted in FY 2023.

The net loss posted by the group at the end of the fiscal year led to a wiping out of its N34.5 billion retained earnings, leading to retained losses of N53.6 billion at the end of the 2023/2024 fiscal year.

The retained losses accrued by the group have led to a negative equity of N47.2 billion, even as the group looks to delist from the NGX.

During the fiscal year, the group’s net cash declined to N32.7 billion, a 68% decline from the N101.6 billion as at FYE 2022/2023.

The decline in cash and cash equivalents was due to an N87.3 billion negative cash flow generated from operating activities.

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.

It will be recalled that the parent company of Cussons Nigeria, in September 2023, announced its plan to buy out the remaining 26.73 percent shareholding of PZ Cussons Nigeria and delist the company from the NGX.

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.

In November, the offer price was increased to N23. However, in March 2024, the Securities and Exchange Commission (SEC) declined PZ Cusson’s request to delist from the NGX. A move applauded by some of the minority shareholders.

In a statement released in March 2024, the holding company, PZ Cussons (Holding) Limited announced plans to review its Nigerian operations in order to reduce risk and maximize shareholders’ value.

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