PZ Cussons Nigeria reported its first annual loss since 2020 for the financial year ending May 31, 2024, according to audited accounts released on Friday.
The company recorded a post-tax loss of N76 billion, with foreign currency obligations reaching an unprecedented level.
PZ Cussons Nigeria, the Nigerian arm of the Manchester-based British consumer goods manufacturer, faced a dramatic increase in foreign exchange losses, which surged over 3,000 percent from N5 billion to N157.9 billion during the review period.
As PZ Cussons’ largest and most diverse market, Nigeria’s financial challenges were exacerbated by the naira’s significant devaluation.
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The currency weakened by approximately 70 percent against the dollar after the Central Bank of Nigeria’s two devaluations between June and January, aimed at aligning the official exchange rate with market rates and attracting foreign investment.
This depreciation significantly impacted PZ Cussons Nigeria, which relies heavily on imports for raw materials and pays for most of its trade obligations in foreign currencies.
As a result, its current liabilities rose to N119.3 billion from N94.7 billion the previous year. The company’s trade payables increased to N90.6 billion from N79.9 billion.
The surge in foreign exchange losses and the subsequent financial strain contributed to a negative asset position in the second quarter, with shareholders’ equity turning negative at N23.2 billion—a figure that increased by 18.7 percent during the review period.
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Despite these challenges, the company’s revenue grew to N152.2 billion, marking a 33 percent increase from 2023. PZ Cussons also received a tax credit of N32.2 billion, compared to a tax liability of N6.1 billion the previous year.
PwC, the independent auditor, did not raise any key audit issues in its report and declined to comment on the company’s financial situation.
The company’s plans to address its negative asset position remain unclear.
In March, a proposed takeover of PZ Cussons Nigeria by its parent company fell through after British investors offered to buy minority shareholders’ shares at below market value.
