The Board of PZ Cussons Nig PLC has called for an extraordinary general meeting of its shareholders and stakeholders over the negative net asset position of the company as of the end of its Q2, 2023/2024 financial year.
The company disclosed this in a notice by its Board to the NGX on Monday following the publication of its results.
The meeting is scheduled to be held on the 30th of March in Abuja and matters to be discussed include; the unaudited financial statement for the period ended March 2023 and the company’s negative net assets.
- It stated, “NOTICE IS HEREBY GIVEN that an Extraordinary General Meeting of PZ Cussons Nigeria Plc (“the Company”) will be held at the Transcorp Hilton, FCT, Abuja, on Wednesday, 13 March 2024, at 1.00 p.m. for the following purposes:”
Special business
- “1. To lay the Unaudited Financial Statements for the period ended 30 November 2023 before the Members.”
- “2. To consider and discuss measures to address the negative net assets of the Company”
PZ Cusson’s financial statement for Q2 2023/2024
In its unaudited financial result for Q2 2023/2024, the company fell into negative net assets recording an after-tax loss of N74.14 billion.
Key highlights of the result
- Revenue- N68.08 billion
- Operating loss- N77.01 billion
- Loss before taxation- N73.79 billion
- Loss after tax- N74.14 billion
Analysis of financial position
In a detailed financial disclosure, the company has attributed a significant N87 billion foreign exchange loss to the naira’s depreciation, alongside a notable 6% reduction in volume. This economic downturn has had a profound impact on its operations.
Further examination of the company’s balance sheet reveals that its liabilities have increased to N178.0 billion, overshadowing its assets valued at N154.8 billion.
This disparity underscores a precarious financial position, with the company cautioning stakeholders of potential future losses related to foreign exchange, given its substantial liabilities.
What the company’s Board is saying
- “The ongoing depreciation of the Naira and decrease in volumes of approximately 6% overall resulted in an Operating Loss of N73.8 billion for the first 6 months of the 2023/2024 financial year. In addition, the Company had a foreign exchange loss of N87.0 billion on our foreign currency-denominated trade obligations, negatively impacting our operating result.”
- “The above Operating Loss is the key driver of the Company having a negative total equity position of N23.2 billion as of 30 November 2023. As of that day, the Group’s financial liabilities, most of which are denominated in foreign currencies, were at N178.0 billion, while the Total Assets were at N154.8 billion”.
Not clever to borrow in foreign currency when your revenues are in Naira….