Shares of PZ Cussons Nigeria PLC have surged over 24% so far in February 2025, climbing from an opening price of N23 to N29 as the company attempts to recover from a pullback in 2024.
Recently, the Board of Directors of PZ Cussons Nigeria PLC resolved to convert $34.26 million of its outstanding loan into equity, aiming to reduce debt and fortify the company’s balance sheet.
This amount is part of a $40.26 million loan provided by its parent company, PZ Cussons Holdings Limited, in 2022 to help manage rising raw material and operational costs, which increased further due to the devaluation of the naira.
In late December 2024, the company released its interim financial statement for the half-year ending November 30, revealing revenue of N96.4 billion, up from N68 billion the previous year, while also slashing pre-tax losses from N73.7 billion to N5.5 billion in 2024.
So far in February 2025, the company’s shares have risen over 20%, surpassing N25 as it seeks to reclaim the N38 level reached in March 2024.
Market trend
PZ Cussons is experiencing a long-term bullish trend, following a notable pullback in 2024 which the stock is currently correcting from.
- The company started 2024 on a strong note, with shares soaring to N38 by March. However, from April through September, the stock faced a decline, dropping below N20.
Fortunately, from the fourth quarter of 2024, the company’s shares began to recover, climbing back to N24.30 by December, supported by a market volume of N74.3 million shares.
- Although there was a temporary stall in January 2025, the stock has since regained the bullish momentum established in the fourth quarter of the previous year, as it aims to reclaim the N38 high reached in March of the previous year.
Converting debt to equity
In mid-February 2025, the Board announced its decision to convert a portion of the outstanding loan provided by its parent company in 2022, totaling $34.26 million, into equity.
- A disclosure signed by Alsec Nominees Limited, the company secretary, and published on the Nigerian Exchange (NGX), indicated that this move is “the most effective strategy to reduce debt and strengthen the Company’s balance sheet, while significantly minimizing the risk of future foreign exchange losses.”
- After this conversion, a remaining balance of $6 million will still be owed to PZ Cussons Holdings Limited.
While the reasons for the company’s stock surge in February 2025 are not fully clear, the decision to convert the loan into equity, along with positive signs of recovery in its interim financial statement for the half-year ending November 30, 2024, likely boosted investor confidence in the stock.
