<h4>Unfavourable Business Climate</h4>
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<p><strong><a href="https://openlife.ng/">OpenLife Nigeria</a></strong> reports that consumer goods company, PZ Cussons Nigeria reported a net loss of N96.4 billion for the fiscal year ending May 31, 2024, according to information contained in its latest unaudited financial statements as obtained from Nairametrics.</p>
<p>The losses led the company to post a negative equity of N47.2 billion at the end of the fiscal year.</p>
<p>PZ Cussons has been struggling with macroeconomic headwinds which has negatively affected its margins.</p>
<p>High interest rates, exchange rate depreciation and galloping inflation are some of the challenges faced by the company.</p>
<p> ;</p>
<p>PZ Cussons Nigeria posted a revenue of N152.2 billion during the fiscal year, representing a 33.5% growth from the N114 billion revenue generated in the previous fiscal year.</p>
<p>The company also reported a gross profit of N60.6 billion, representing an 84% increase from the N32.95 billion gross profit posted in the previous fiscal year.</p>
<p> ;</p>
<p>Despite achieving an impressive 40% gross margin during the fiscal year, the group experienced a substantial exchange loss of N158 billion, resulting in a negative operating margin.</p>
<p>Consequently, the group reported an operating loss of N111.5 billion.</p>
<p>The group posted a pre-tax loss of N109 billion, a contrast from the N20.46 billion pre-tax profit posted at the end of the 2022/2023 fiscal year.</p>
<p> ;</p>
<p>Due to its losses, the group enjoyed a tax credit of N12.5 billion, resulting in a net loss of N96.4 billion, down from the N13.3 billion profit after tax posted in FYE 2022/2023.</p>
<p>Key Highlights FY 2024 vs FY 2023</p>
<p>Revenue: N152.2 billion, +34% YoY<br />
Cost of sales: N91.6 billion, +13% YoY<br />
Gross profit: N60.6 billion, +84% YoY<br />
Administrative expenses: N1.3 billion, -84% YoY<br />
Exchange loss: N158 billion, +3090% YoY<br />
Operating profit/(loss): (N111.5 billion), -1456% YoY<br />
Net interest income: N2.2 billion, -55% YoY<br />
(Loss)/Profit before tax: N109 billion, -632% YoY<br />
(Loss)/Profit for the year: N96.4 billion, -772% YoY<br />
Total assets: N137.6 billion, -17% YoY</p>
<p>The net loss posted by the group at the end of the fiscal year led to a wiping out of its N34.5 billion retained earnings, leading to retained losses of N53.6 billion at the end of the 2023/2024 fiscal year.</p>
<p>The retained losses accrued by the group have led to a negative equity of N47.2 billion, even as the group looks to delist from the NGX.</p>
<p>During the fiscal year, the group’s net cash declined to N32.7 billion, a 68% decline from the N101.6 billion as at FYE 2022/2023.</p>
<p>The decline in cash and cash equivalents was due to an N87.3 billion negative cash flow generated from operating activities.</p>
<p>PZ Cussons Nigeria’s borrowings from its parent company, PZ Cussons (Holding) Limited, surged to N59.8 billion by the end of the 2023/2024 fiscal year, up from N18.7 billion at the close of the previous year.</p>
<p>This increase is attributed to a $40.26 million non-interest loan facility extended by the parent company to the Nigerian subsidiary in June 2022.</p>
<p>The FX revaluation adjustment resulted in an additional N41.1 billion increase to the original borrowed amount.</p>
<p><strong>PZ Cussons Nigeria delisting</strong></p>
<p>In September 2023, the parent company announced its plan to buy out the remaining 26.73% shareholding of PZ Cussons Nigeria and delist the company from the NGX.</p>
<p>At the time, an offer price of N21 per unit was made to the minority shareholders.</p>
<p>However, this price was rejected by certain shareholders who claimed such a price was unfair to them.</p>
<p>In November, the offer price was increased to N23. However, in March 2024, the Securities and Exchange Commission (SEC) declined PZ Cusson’s request to delist from the NGX.</p>
<p>A move which was applauded by some of the minority shareholders.</p>
<p>In a statement released in March 2024, the holding company, PZ Cussons (Holding) Limited announced plans to review its Nigerian operations in order to “<em><strong>reduce risk and maximize shareholders value.”</strong></em></p>

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