PZ Cussons, a British manufacturer of personal healthcare products and consumer goods, has recorded an after-tax loss in its first quarter (Q1) ended August 2024 as a result of reduction in foreign exchange (FX) loss during the period.
The impact of FX volatility reduced for the firm as it recorded N9.28 billion exchange loss in Q1 ended August 2024 from N44.5 billion in the same period of 2023.
After-tax loss stood at N4.65 billion from N38.6 billion during the period reviewed.
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However, the firm recorded foreign exchange loss on cash and cash equivalents which stood at N7.75 billion while none was recorded in the same period of 2023.
Cash, cash equivalents and bank overdrafts at the end of the year dropped to N17.2 billion from N111.1 billion.
Net cash flow generated from operating activities stood at a negative of N1.78 billion from a positive of N9.87 billion. Net cash used in investing activities stood at N24.3 million from N1.69 billion.
Net cash flow used in financing activities stood at a negative N2.16 billion from a negative of N2.04 billion.
Revenue grew to N39.9 billion from N31.07 billion while cost of sales grew to N27.8 billion from N21.5 billion. Loss per share stood at -N1.17 per share from -N9.73 per share.
Rental income increased to N243.1 million from N78.1 million.
PZ Cussons said it has commenced plans to sell its African subsidiaries to any interested buyer.
The firm stated this in its preliminary results published on its website for the year ended May 31, 2024, noting that it is looking at a partial or full sale to mitigate the company’s exposure to fluctuations in the naira, which has devalued by 70 percent.
It further said the board has also received multiple interests regarding the sale of its African business.
“Over the last 12 months, we have made continued operational progress and delivered against the strategic priorities set out at the start of the year, against the backdrop of macro-economic challenges.
“At the same time, we have taken the important first steps to transform our business and maximise shareholder value, by refocusing our portfolio on where we can be most competitive.
“The period was marked by a 70 percent devaluation of the Nigerian naira, which has had significant implications on our reported financials. We have worked hard to mitigate the impact of this on the group while continuing to serve Nigerian consumers who are facing unprecedented inflation and economic difficulties,” it said.
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Earlier in April, the company had stated that it was reviewing its African business to reduce risk and maximise shareholder value. PZ Cussons has faced significant challenges over the past year due to the impact of Nigeria’s macroeconomic issues on its global operations.
Additionally, the company’s plan to delist from the Nigerian Stock Exchange encountered a setback after the Securities and Exchange Commission (SEC) rejected its proposal.
Jonathan Myers, the chief executive officer of PZ Cussons, said in April that the company was reviewing its brands and geographies over macroeconomic challenges and complexities in Nigeria.
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