During the past two trading sessions, the share price of PZ Cussons Nigeria witnessed a depreciation of 19.94%, settling at N30.80 per share at the close.
Consequently, the market capitalization decreased from N150.878 billion, as of May 7, 2024, to N122.290 billion.
The loss:
Checks by Nairametrics showed that the personal/household products stock dropped by 10% to close at N34.20 per share from N38.00 which was the opening figure before the commencement of the 8th of May’s trading.
Also, the company’s share at the close of trading on 9th May 9, 2024, declined by 9.94% to close at N30.80 from N34.20 it opened for trading, bringing a cumulative decline to 19.94%.
Further checks revealed that PZ Cussons Nigeria finished the two days trading at N122.290 billion in market capitalisation on the Nigerian Exchange (NGX) as against N150.878 billion when the trading activities began on 7th May, hence posting a loss of N28.587 billion.
PZ Cussons began the year with a share price of N26.70 and has since gained 15.4% on the price valuation.
Recommended reading: PZ Cussons to review its Nigerian business to reduce risks
Financial performance
PZ Cussons Nigeria Plc has continued to face challenges, evidenced by a reported loss of N94.78 billion in the third quarter of the fiscal year 2023/24, in contrast to the N11.213 billion gain recorded during the same period in 2022.
As per the unaudited interim financial statements for Q3 2023/24, ending on February 29, 2024, which were filed with the Nigerian Exchange, the company achieved a 27% increase in revenue, reaching N110.63 billion, up from N86.99 billion in Q3 2022.
Accompanying the notice of the Extraordinary General Meeting issued earlier this year, PZ Cussons provided an explanatory note. It attributed its negative net asset position to the depreciation of the naira.
Nairametrics reported that PZ Cussons Nigeria’s attempt to delist from the NGX hit the rocks as the Securities and Exchange Commission (SEC) declined the company’s request for its major shareholder, PZ Cussons (Holdings), to buy out other shareholders.
According to a corporate disclosure seen by Nairametrics, PZ Cussons (Holding) intended to buy the shares held by other PZ Cussons Nigeria shareholders at N23 per share.
However, the SEC declined the company’s request for “No Objection” to this move.
Shareholders react
The decline in share prices which was recorded by the company can be attributed to investors’ negative sentiment which triggered sell-offs plunging the company’s value down. Its recent actions geared towards exiting Nigeria are reducing investor confidence.
In response to the recent developments, the President of the New Dimension Shareholders Association of Nigeria, Mr. Patrick Ajudua, conveyed his perspective to Nairametrics in an exclusive conversation.
He highlighted the concern that PZ Cussons Nigeria’s recent decision to exit the Nigerian market has adversely impacted investor confidence.
This concern is compounded by the company’s choice to engage a third party to assume its operations. Consequently, investors perceive a potential threat to the prospects of their investments.
“The challenge is that PZ Cussons Nigeria by its recent actions to exit Nigeria has lost investors’ confidence and coupled with the decision to get a third party to take over from them.
“With these, investors believe that the prospects of their investment are threatened,” he said
What you should know
However, trading activities on the floor of the NGX grew by a meager 0.03% to close at 98,255.72 points. Sell pressures in AIRTELAFRI (-0.35%), FBNH (-1.38%), and DANGSUGAR (-4.96%) were encumbered by demand for blue-chip ZENITHBANK (+0.59%), UBA (+0.58%), and ACCESSCORP (+0.86%).
- Nevertheless, the market is set for a loss this week. The ASI year-to-date (YTD) return increased to 31.40%, while the market capitalization gained N17.96 billion to close at N55.57 trillion.
Analysis of the day’s market activity revealed that trade turnover settled 81.56% higher than the previous session, with 676.42 million shares valued at N16.66 billion in 8,415 transactions.
Nigerian Breweries (0.00%) led the volume and value table with 300.36 million units traded in deals totaling N6.91 billion.