NIGERIA – The personal healthcare and consumer goods company, PZ Cussons Nigeria has posted 14.3% decline in revenue to US$43.77 million strained by low consumer spending in the first quarter of 2018/19 financial year.
The Nigerian unit of the British conglomerate recorded a net loss of US$572,655.62 in the period ended 31 August attributed to low patronage of its products due to subdued consumer disposable income.
However, Reuters reports shares of the company were up 1.3% at 232.4 pence in early trading.
Challenging trading conditions in Nigeria were offset by introduction of new products and cost cuts.
Its Nutricima business, which makes milk and yogurt-based beverages, had moved into a breakeven position from making losses last year.
The consumer goods company has a diverse product line that includes electricals, personal and homecare products, dairy brands under the Nutricima business line and others.
PZ Cussons unveiled its quarterly results which unravelled the struggles of its Nigerian unit including price, volume and margin pressures in some of its product categories.
Nigeria, one of the company’s largest single markets was characterized by macroeconomic challenges, lack of liquidity at both consumer and shrinking trade levels for its products.
In a trading update, the company said consumer disposable income in Nigeria remained subdued ahead of elections in that country.
“Whilst the Group has delivered good profit growth in Asia and a creditable result in Europe, macro-conditions in Nigeria have resulted in a sharp decline in Africa profits for the year and hence a disappointing result for the Group as a whole,” said a statement from Global Chairperson of PZ Cussons, Ms Caroline Silver.
The firm which gets 36% of its revenue from Africa had in July issued a trading warning of a challenging year ahead with a fall in revenue and sales across the continent.
For the full year ended May 31, 2018, profit came in lower with a record of 48% decline in profit after tax.
The company said it was focussing on optimising price points and sizes across the key brands in its Africa portfolio.