Soap manufacturer, PZ Cusson has posted a loss after tax of N76.02 billion in the financial year ending 31 May 2024.
This is according to the company’s audited financial statement posted on the NGX in which revenues increased by 34% to N152.24 billion.
According to the disclosure, the company witnessed a reversal of fortunes in the year ending May 2024 from recording a profit after tax of N14.35 billion in the same period of 2023 to a N76.03 billion loss after tax. This marked a 630% decline in performance.
Key Highlights from the result
- Revenues– N152.24 billion, an increase of 34% from N113.96 billion in 2023
- Cost of sales– N98.12 billion from N81.01 billion in 2023
- Gross Profit– N54.12 billion from N32.94 billion in 2023
- Foreign Exchange Loss– N157.91 billion from 4.95 billion in 2023
- Operating loss– N127.43 billion a decline of 1649% from operating profit of N8.22 billion in 2023
- Loss Before Taxation– (N108.19 billion) a decrease of 629% from PBT of N20.46 billion in 2023
- Income Tax credit– N32.17 billion from tax expense of N6.11 billion in 2023
- Loss after tax– N76.023 billion from profit after tax of N14.348 billion in 2023
- Non-controlling interest– (N7.614 billion) a decline of 623% from N1.455 billion in 2023
- Loss attributed to equity holders of parent company– (N68.408 billion) from a profit of N12.89 billion in 2023
- Basic and Diluted EPS– (N17.23) from N3.25 in 2023
What you should know
The reversal of fortunes in the company’s performance stems from significant foreign exchange losses which has also impacted on the performance of other firms in the sector.
PZ Cussons has been grappling with macroeconomic challenges that have significantly impacted its profit margins. The company has faced hurdles such as high interest rates, exchange rate depreciation, and soaring inflation.
PZ Cussons Nigeria reported a revenue of N152.2 billion for the fiscal year, reflecting a 34% increase from the N114.96 billion generated in the previous year. The company also saw a significant rise in gross profit, reaching N54.12 billion, a 64.29% growth compared to the N32.94 billion recorded in the prior fiscal year.
However, the company reported an operating loss of N127.43 billion, a stark contrast to the N8.22 billion profit achieved in the previous year. Similarly, the group posted a pre-tax loss of N108.19 billion, a sharp reversal from the N20.46 billion pre-tax profit reported at the end of the 2022/2023 fiscal year.
As a result of these losses, the group received a tax credit of N32.17 billion, leading to a net loss of N76.023 billion, a substantial decline from the N14.348 billion profit after tax posted in the previous fiscal year.
Plans of delisting and review of African business
Last year, PZ Cussons unveiled plans to buy out its minority shareholders at N21 per share, aiming to delist from the Nigerian Stock Exchange (NGX). However, the proposal was rejected by shareholders, who argued that the offer undervalued the company.
- In October, the company attempted to sweeten the deal by raising the offer to N23 per share. This revised offer was also rejected, this time by the Securities and Exchange Commission (SEC), as it fell below the company’s trading price on the NGX.
- In March 2024, PZ Cussons (Holding) Limited issued a statement announcing its intention to review its Nigerian operations to “reduce risk and maximize shareholders’ value.”
