PZ Cussons Plc, a maker of personal healthcare and consumer goods, has returned to profitability after the economy experienced disruptions following the outbreak of the Coronavirus (COVID-19) pandemic.
The firm recently released its 12-months financial performance report for 2021 as it has a unique calendar that ran from May 2020 to May 2021. PZ Cussons posted a revenue increase of 23 percent to N82 billion in the period under review from N66.9 billion in 2020 while its gross profit surged by 170 percent from N8.6 billion to N23.2 billion.
Its cost of sales stood at N59 billion which was a marginal 1.2 percent increase from the N58 billion utilized in 2020, while its operating profit dropped by 50 percent to N3 billion from N6 billion in 2020.
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The manufacturer’s profit before tax grew by 133 percent to N2.6 billion from a loss of N7.9 billion in the same period of 2020. Following a tax payment of N808 million, its profit after tax hit N1.83 billion which is a 125 percent increase from the N7.23 billion loss it realized in 2020.
Business experts believe that the shift in consumer’s habit and preference for essential items in response to COVID-19 impacted the company’s sales positively, in addition to the fact that the firm reviewed upward prices of some products.
“The company raised prices on a number of products last year which supported revenue growth and margin expansion,” Ayorinde Akinloye, a research analyst at CSL Stockbrokers said.
Furthermore, PZ revenue was also helped by the sale of factory premises situated within plot 20A Ikorodu Industrial Scheme, Ikorodu, Lagos.The approximately 67,733.235 square metres property was sold to Friesland Campina Wamco Nigeria Plc.
The company received a sum of N2.1 billion as consideration for the sales resulting in profit on disposal of N1.899 billion subject to a capital gains tax of N199.8 million.
Its interest income dropped by 21.8 percent as it achieved N238 million during the period from N304 million in the previous year, also Its total assets increased by 11.8 percent from N78.45 billion in 2020 to N87.74 billion in 2021. PZ’s liabilities increased to N51.7 billion representing 18 percent increase from the N43.8 billion it had in 2020.
Due to issues around foreign exchange availability and naira devaluation, the firm experienced foreign exchange loss of N6.5 billion which is a significant 595 percent increase from the N945 million it lost in the same period of 2020.
According to experts, FX illiquidity definitely had a significant impact in the company’s operations, as they probably had to source for dollars from expensive unofficial sources to finance purchase of inventory which would impact on material cost.
It can be recalled that the firm appointed Panagiotis Katsis as its Chief Executive Officer (CEO) following the retirement of Christos Giannopoulos in June 2020. It also appointed Zuber Momoniat, a South African as its chief finance officer in April 2020.
PZ engages in the manufacture, distribution and sale of a wide range of consumer products and home appliances through owned depots. Popular brands include Morning Fresh, Mamador, Carex, Cussons Baby, Premier, Robb, Venus and Joy soap.
These products are leading brand names throughout the country in detergent, soap, cosmetics, refrigerators, freezers and air conditioners. The group also distributes products of Nutricima Limited, Harefield Industrial Nigeria Limited and PZ Wilmar Food Limited.
