PZ Suffers 48% Profit Decline, Offers N0.15 Dividend

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• Jamodu Blames Weak Purchasing Power, Bloating Costs

The board of PZ Cussons Nigeria, on Friday published its audited result for the year ended May 31, 2018, lamenting the weakening purchasing power, leading to a flat 3% growth in sales revenue, amidst poor infrastructure and effects of inflation in the country that jerked up operating cost, resulting a 48% decline in net profit for the period.
Another major highlight of the result presented to the Nigerian Stock Exchange (NSE) by the Fast Moving Consumer Goods (FMCG) maker was the recommendation of N595.571m, or 15 kobo dividend per share, from the previous N1.985bn, or 50 kobo in the prior year.
According to the result, revenue crawled from N78.215bn in the corresponding period of 2017, to N80.552bn, after an otherwise promising first half as a result of initiatives implemented by the board and management. These included, according to Chief Kola Jamodu, the chairman, a further streamlining and optimization of the product portfolio in a bid to focus on key brands and categories, so as to restore margins.
There were also a further consolidation of existing infrastructure and facilities to create synergies and improve efficiency on the supply chain side of the business; in addition to a review of product costs, with focus on packaging reduction and reduce plastic consumption, in addition to reducing overheads and enhancing time to market.
Cost of sales rose to N56.097bn from N50.267bn; leaving gross profit at N24.455bn, down from the previous year’s N27.947bn. Selling and distribution cost growth was negligible at N9.601bn from N9.095bn; even as administrative expenses climbed by about N1bn from N5.636bn to N6.625bn; following which operating profit declined from N13.215bn to N8.228bn, a 38% slip.
The company’s foreign exchange rate loss dropped from N8.797bn to N5.391bn; even as other income slowed down to N128.748m from N198.601m; while interest income from bank deposits crashed to N180.657m from N485.569m; and interest cost on bank facilities soared to N832.373m from N290.477m.
Profit before tax fell 52% to N2.313bn from N4.811bn, even as the impact on the net profit which fell from N3.686bn to N1.927bn, was mitigated by the 66% reduction in tax expenses to N386.389m from N1.124bn.
Earnings Per Share for the period reduced to 48 kobo from 84 kobo. The 15 kobo dividend is slated for payment on Friday, October 19, 2018.


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