PZ Cussons Nigeria Plc’s (NSE – PZ) financial woes have continued to deepen as the company reported a loss in a financial year for the first time in five years. This is according to its annual reports and consolidated financial statements for the period ended 31 May 2020, released to the Nigerian Stock Exchange and the investing public on Friday.
The company’s revenue declined by 10% to N66.992 billion from the N74.336 billion reported in 2019. PZ recorded a loss of -N7.240 billion, a 726% slump from N1.156 billion profit posted in 2019 despite receiving a tax credit of N745.176 million.
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A review of the company’s income statement show that the cost of sales – N58.371 billion represents N87.13% of the total revenue thereby leaving the company with a gross profit of N8.622 billion – just 12.87% of the revenue.
The gross profit was wiped out by a selling and distribution expense of N10.213 billion. In addition, PZ spent N5.477 billion as an administrative expense and N454.234 million as an interest cost. The company also recorded an exchange loss of N945.860 million.
The company’s total assets slightly dropped by 1.86% to N78.451 billion as at 31 May 2020. Whereas the liability rose by 28.4% to N43.891 billion.
The significant rise in liability despite under 2% growth in total assets made up for a 24.46% decline in total equity due to the N10.87 billion decline in the company’s retained earnings to N22.923 billion.
The increase in the total liability was largely due to an increase in trade and other payables to N37.201 billion from N29.343 billion in 2019 and deferred taxation that rose to N5.364 billion.
Notably, PZ holds neither long nor short term borrowing.
According to its cash flow statement, PZ generated N12.086 billion from its operating activities whereas N1.398 billion and N2.414 billion were used in investing and financing activities respectively.
At the end of the period, PZ’s cash and cash equivalents netted N10.793 billion at the end of the period in review.
Q1 2020/2021 financial
PZ simultaneously released the full-year 2019/2020 audited report with the first-quarter report for its current financial year. According to the financial statements, the company fared better in the three months ending 31 August 2020 as its revenue increased by 18.3% to N18.7 billion whereas the loss after tax reduced to N212.358 million from N1.096 billion posted in the same period in 2019.
The gross profit margin stood at 26% and the current ratio settled at 1.3.
About PZ Cussons Nigeria Plc
The company was incorporated on 12 April 1948. The principal activities of the company are manufacturing, marketing, sale, and distribution of a wide range of consumer products and home appliances which are among the leading brand names throughout the country in detergent, soap, cosmetics, refrigerators, and air conditioners.
The group also distributes the products of Nutricima Limited, Harefield Industrial Nigeria Limited, and PZ Wilmar Food Limited.
At the close of trading on Friday, the equity price of PZ was N4.00 per share. The 52 week high and low prices are N6.30 and N3.75 per share respectively.
YTD the share price is down by 29.20% while in 3 years it has lost 83.01% of its value.
By; Ifunanya Ikueze