PZ Cussons Nigeria reports US$3m loss after tax in the first quarter

NIGERIA – PZ Cussons Nigeria Plc, a subsidiary of Manchester based PZ Cussons Holdings has recorded a loss after tax of N1.1 billion (US$3m) in the first quarter of 2019, compared to a loss after tax of N204 million (US$564,000) recorded during the same period in 2018.  This represents a 435.49% decline.

During the period under review, the company recorded N15.80 billion (US$43.7m) in revenue as against N15.89 billion (US$43.9m) recorded in the quarter of 2018. This represents a 0.55% revenue reduction driven by low consumer demand, which was impacted by a weak economy as well as competition in the market place.

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In a trading update the British parent company, PZ Cussons Plc, said that its “key markets continue to be impacted by consumer fragility, with the Nigerian economy remaining depressed.”

It further said that it anticipates market conditions to remain challenging across its key geographies for the balance of the first half of the year.

However, improvement is anticipated in the second half of the year, as planned marketing activities behind focus brands and overhead reduction programmes take effect.

In July the consumer goods company revealed plans to sell-off non-core brands and simplify its Nigerian business as part of its newly launched strategy that seeks to improve the company’s balance sheets.

The producers of Nutricima milk and yoghurt drinks had warned of a sharp deterioration in its key market in Africa – Nigeria.

The group said a major overhaul was required to get PZ Cussons back on track after writing off US$27.6 million against its Nigerian Nutricima milk business and Australian brand five:am, which makes yoghurt and granola.

PZ Cussons said it will now focus on personal care and beauty brands because they represent the company’s “strongest brands across the geographies that offer us the best opportunities for revenue and margin growth.”

There will also be a slimming-down of its Nigerian business, where the economy has suffered and disposable income has reduced, to cope with “current economic realities whilst still being ready to take advantage of future recovery.”

PZ Cussons Nigeria manufactures a wide range of consumer products which includes electricals, personal and homecare products, and dairy brands under the Nutricima business line which includes Nunu, Olympic and Coast milk brands.

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