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Fast Moving Consumer Goods (FMCG) company, PZ Cussons, has announced results for its 2017 full-year financial year.

The soaps and cosmetics maker in its full-year 2017 shows pretax profit dropped 23 percent, as sales fell in Nigeria, its largest market.

The company’s pretax profit fell to 66.6 million pounds ($87.2 million) for the 12 months to May 31, 2018, from 86.5 million pounds a year earlier, while full-year revenue dipped 5.8 percent to 762.6 million pounds.

Recall that the company had earlier warned its shareholders that full-year earnings would be at the lower end of its forecast of 80-85 million pounds ($104.8 million – $111.3 million).

“Following the significant cost inflation of recent years, the Nigerian consumer’s discretionary income remains under pressure with subdued buying levels. As a result the usual peak season uplift has not occurred to the expected level.

“Consequently, inventory levels in the trade remain high leading to intense competition, most noticeably in the milk category, which in return is resulting in lower volumes, prices and margins.”

PZ Nigeria reported a profit after tax of N589 million for the second quarter ended November 30, 2018, compared to a loss of N289 million in the same period in 2016.

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Last year, PZ Nigeria reported a full-year profit before tax of N3.3 billion and revenue of N79.6 billion. The company achieved a profit margin of 4.3% in 2016 up from under 2% in 2015. Profit margin had averaged 6% in the three years preceding the recession that hit Nigeria. The company’s return on equity was less than 10% in 2016.

At a media parley held in Lagos recently, Chief Executive Officer (CEO) of the firm, Christos Giannopoulos, unveiled plans to increase its investments in the agricultural sector, specifically oil palm. The company’s agricultural venture is in partnership with Malaysian oil giant, Wilmar International Limited.

The company has also spent over N65 billion across the country, this includes a N20 billion Oil Palm refinery built in Lagos State. In addition, it had acquired the Calaro oil palm plantation previously owned by the Cross River State government. Other investments in the state include plantations at Ibad and Akamkpa.

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PZ Cussons closed at N15.15 on Tuesday trading session on the floor of the NSE. One Year return the company is down by 27.74%.

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The company markets several products including popular brands, Premier Soap, Robb menthol, Nunu Milk. Others include Mamador cooking oil and the Haier Thermocool range of electronics.

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