PZ Cussons Records N1.6bn Profit in Nine Months

Shareholders of PZ Cussons Nigeria Plc should expect an improved performance for the year ending May 30, 2017, going by the nine months results ended February 28, 2017. The household and person care products maker, posted a revenue of N57.1 billion, up 13 per cent from N50.7 billion in the corresponding period of 2016.

Cost of sales stood at N37.9 billion, up from N37 billion in 2016, while gross profit rose by 40.4 per cent to N19.2 billion, from N13.7 billion in 2016. Operational expenses were N11.1 billion, up marginally from N10.9 billion. Profit before tax was N2.4 billion in 2017, up from N2.1 billion in 2016. Profit after tax was flat N1.6 billion. However, market analysts said the performance indicates stability in the profitability of the company, compared with a loss of N288 million posted in the first half ended November 30, 2016.

Analysts at FBN Quest said the third quarter (Q3) is PZ’s most impressive results in a while. “While sales grew by 19 per cent to N23.8 billion, the highest quarterly revenue in recent times, both PBT and PBT advanced by over 100 per cent. Although the comparable results in Q3 2016 were weak, the results indicate that PZ is on a recovery path, following some improvement in fx liquidity,” the analysts said.

According to them, strategies introduced by the company to improve top-line seem to be paying off, coupled with the impact of increased sales due to seasonality.

“Also, a gross margin expansion of 820bps to 32.5 per cent more than offset a N1.2 billion fx loss to lead to a PBT of N2.8 billion during the quarter. We suspect the company is still benefitting from using old raw materials purchased at historical prices, like in the prior quarter,” they added.

PZ Cussons paid a dividend of 50 kobo last year. Speaking to the shareholders at the annual general meeting, Chairman of P Z Cussons, Chief Kolawole Jamodu said despite the deteriorating operating environment, the company had remained focused and managed to deliver a steady performance for the period to grow shareholder value.

He said there are future prospects for the company given that the presently economic predicament is transient.

”We regard current economic challenges as transitory and we remain excited about the future of the company. Our confidence has been emboldened by positive policy changes being adopted by the government such as the new foreign exchange regime that has been introduced by the Central Bank of Nigeria. Our brands remain strong and popular with consumers, which leaves us well placed to hold our market and exploit any emerging opportunities,” Jamodu said.