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Company Results

PZ Cussons suffers a pre-tax loss of N7.984 billion in 2020

The decline in revenue is attributable to the fall in sales from the core segment of the group. 

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PZ Cussons suffers a pre-tax loss of N7.984 billion in 2020

PZ Cussons Nigeria Plc, the dynamic consumer products group, has released its year-end audited financial report for the period ended 31 May 2020. The results revealed that the group suffered a pre-tax loss amounting to N7.984 billion. 

According to the figures contained in the audited financial report, the group’s financial performance for the year is unimpressive when compared with the N1.942 billion pre-tax profit the company reported in 2019. 

READ: No trophy for International Breweries after bland Q2 results

Highlights 

  • Revenue decreased by 9.879%
  • Cost of sales increased by 1.984%
  • Exchange loss increased by 112.899%
  • Bottom line decreased by 511.066% 

Facts behind the loss  

A review of PZ audited annual financial report revealed that the decline in revenue which spiked the pre-tax loss of N7.984 billion came from the 17.5% fall in the sale of Home and Personal Care Products, which is the core business segment of the group. 

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READ: Polaris Bank’s profit rises to N26.2 billion from N2.8 billion

However, in the light of the figures contained in the reports, Nairametrics was able to uncover that the sales of the company’s products, which include products such as Morning Fresh, Zip, Canoe, Premier, Joy, Stella, Venus, Imperial Leather, Cussons Baby, Carex, Robb etc., declined in 2020, compared to the sales from this segment in the corresponding period of 2019. 

On the flip side, revenue from the sales of Durable Electrical appliances increased from N27.136 billion in 2019 to N28.053 billion in 2020. 

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READ: PZ Cussons UK to sell Nigerian diary arm to FrieslandCampina WAMCO

Other downward pressures on profitability 

The group’s prospect for profitability for the financial year 2020 was eroded by Selling and distribution expenses of N10.214 billion, and Administrative expenses of N5.477 billion. However, these expenses completely eroded the Gross Profit of N8.622 billion to the tune of N7.069 billion operating loss. 

READ: Guinness gains on NSE despite N17 billion pre-tax loss

However, the N7.069 billion operating loss was compounded by an Exchange loss of N945.86 million, and an interest cost of N454.234 million, this drove the group’s pre-tax loss to the tune of N7.984 billion. 

Key issues facing the group 

Apart from the pressures from competitors which has led to the commoditization of some of the products in the core business segment of the group, the group’s activities are exposed to the financial risks from the fall in the international value of naira “the exchange rates”. 

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However, PZ manages foreign exchange forward contracts but it is primarily exposed to the US dollar as a 15% decrease in the value of Naira would lead to a decrease in profitability and the total equity of PZ Cussons. 

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Company Results

CAP Plc: Increase in investment income, others boost revenues

CAP Plc recorded a boost in its two revenue-generating units, as total revenues grew.

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CAP Plc is running at a risk of increased bad debts

CAP Plc reported revenues of N5.99 billion in 2020 – 3.63% increase compared to N5.78 billion in the corresponding period of 2019.

What you should know

The key highlights of its financial year 2020.

  • Revenues increased by 3.63% from N5.77 billion to N5.99 billion YoY.
  • Revenues from paint products increased to N6.05 billion, +3.69% YoY.
  • Revenues from services increased to N33.90 million, +44.11% YoY.
  • Cost of sales increased to N3.30 billion, +8.86% YoY.
  • Gross profits decreased to N2.69 billion, -2.06 YoY.
  • Operating profits decreased to N1.17 billion, -20.94% YoY.
  • Pre-tax profits decreased to N1.36 billion, -24.50% YoY.
  • Post-tax profits decreased to N927.50 million, -24.50% YoY.
  • Earnings Per Share decreased to 133 kobo, -24% YoY.
  • Total assets increased to N7.82 billion, +15.64% YoY.
  • Total liabilities increased to N4.37 billion, +3.07% YoY.
  • Total equity increased to N3.45 billion, +36.78% YoY.

(READ MORE: Nigeria’s inflation rate hits 13.71% as food prices soar)

Bottom Line

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CAP Plc recorded a boost in total revenue from an increase in its two revenue-generating units.

Though companies have generally recorded decreased revenues in the last three quarters, mostly due to COVID-19 – CAP Plc was able to increase its total revenues; however, pre-tax profits decreased.

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Company Results

Custodian Investment Plc posts Profit After Tax of N1.5 billion in Q3 2020

The company recorded impressive results in some key financial metrics such as gross revenue and profit after tax.

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Custodian Investment Plc posts Profit After Tax of N1.5 billion in Q3 2020

Custodian Investment Plc has declared a Profit After Tax (PAT) of N1.5 billion in the third quarter of 2020, as against N1.37 billion posted the same period in 2019.

This is according to the consolidated financial report of the firm for Q3 2020.

READ: Guinea Insurance Plc gives optimistic Q3 earnings forecast in spite of COVID-19

READ: PZ Cussons and its sticky pattern of losses

What you should know

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Custodian Investment Plc also recorded impressive results in some key financial metrics such as;

  • Gross Revenue grew by 42% from N15.85 billion to N22.52 billion.
  • Interest income advanced by 11.3% Year-on-Year.
  • Investment income gained 25.4% from N5.61 billion to N7.03 billion.
  • Earnings per share appreciated by 50% from N24 to N36 for the period under view.
  • Other investments and operating income grew by approximately N6.40 billion.
  • Total assets also grew by 27% from N118.01 billion to N149.94 billion for the period under view.
  • Profit before tax marginally grew by 2.8% from N1.69 billion to N1.73 billion.

READ: Presco Plc projects N24.53 billion turnover in Q4 2020

READ: This FMCG giant has hit a one year low

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What this means

  • The growth in revenue and profitability is attributable to an increase in financial and reinsurance assets which appreciated by 35.62% and 32.5% (Y-O-Y) respectively.
  • An increase in investment and interest incomes were also very important in driving revenue.
  • On the contrary, despite recording increased gross revenue, the net profit margin decreased over time, from 23.91% recorded as of Q3 2019 to 5.8% in Q3 2020. Thus, indicating a probability of weak cost control mechanism or that variable values are not well controlled.
  • The Net profit margin indicates that the company earned N0.057K in profit for every N1 it received in revenue as of Q3, 2020. This is lower compared to N0.24k for every N1 it earned in revenue in Q3, 2019.
  • This is evident in the higher operating expenses recorded as of Q3 2020 which is up by 97.4% when compared with the figures obtained in the corresponding period last year (Q3 2019).

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Company Results

Trans-Nationwide Express Plc suffers N79 million loss in Q3 2020

Trans-Nationwide Express Plc has recorded a loss that amounts to the tune of N79 million in Q3, 2020.

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Trans-Nationwide Express Plc, Trans-Nationwide Express Plc appoints new Managing Director 

Trans-Nationwide Express Plc, a logistics and courier service company in Lagos, Nigeria, suffered N79 million loss in the third quarter of 2020.

This disclosure was based on the Q3 2020 financials sent to the Nigerian Stock Exchange on Wednesday.

READ: NIPOST’s new charges could have ruined the e-commerce/logistics industry

Breakdown

  • Revenue declined by 7.5% Year-on-Year, from N548.3 million as of the corresponding period last year to N507.17 million this year.
  • The dip was largely due to a decline in revenue from courier services, which contributed about 54.1% of the total revenue as of Q3, 2020.
  • The revenue from courier services declined from N326.44 million to N274.40 million for the period under view.
  • On the contrary, other revenue churning segments like Freight income, logistics income, internal mailing income, and warehouse all recorded a positive outlook, as they all grew viz-a-viz last year’s figures.
  • Gross profit declined by 7.1% from N321.23 million to N298.40 million in the period under view.
  • Administrative expenses increased by 17.5% from N321.0 million to N377.1 million within the period under view.
  • Cash received from customers recorded a dip from N542.28 million to N523.07 million, indicating a slip of about 3.5%.

READ: BRT owners, Primero says they lost N100 million to #ENDSARS violence

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What this means

The pandemic affected several businesses and sectors, the transportation and logistics sectors were not exempted. The loss might have been largely due to the period of economic inactivity, due to embargo on inter-state and international travels.

The high cost of maintenance, coupled with little or no revenue in those periods also played a major part.

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READ: PZ incurs N1 billion in exchange rate loss 

READ: Lafarge Africa Plc: Increase in cement sales boosts revenues

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