PZ Cussons slashes pre-tax losses by 99.1% amid rise in operating profit and scrap sales 

PZ Cussons has announced its interim financial statements for the second quarter of 2024/25, reporting a pre-tax loss of N301.7 million, a significant improvement from N35.1 billion seen in the same quarter of 2023/24.

This represents a 99.14% reduction in losses, driven by an increase in revenue with a year-to-date figure of N69.1 billion.

The company recorded quarterly revenue of N56.4 billion, reflecting a 52.57% rise year-over-year from the N37 billion reported in the previous year.

Additionally, PZ Cussons noted an 859.86% year-over-year increase in ‘other income,’ which reached N726.8 million, supported by rental income and scrap sales totalling N469.7 million and N500.2 million, respectively.

Key highlights

• Revenue: N56.4 billion, +52.57% YoY
• Cost of Sales: N41.6 billion, +68.48% YoY
• Selling and Distribution Expenses: N4.3 billion, +12.47% YoY
• Operating Profit: N48 million, -100.13% YoY
• Other Income: N726.8 million, +859.68% YoY
• Net Interest Income: N1 billion, +169.80% YoY
• Pre-tax Loss: N301.7 million, -99.14% YoY
• Basic EPS: (N0.59), -93.40% YoY
• Assets: N173.9 billion, +10.78% YoY

Commentary

The company reported a commendable year-over-year revenue increase of 52.57%, reaching N56.4 billion for the quarter, which elevates its nine-month revenue to N96.4 billion.

• However, alongside this growth, the cost of sales also surged by 68.48%, rising to N41.6 billion from N24.7 billion in the same quarter last year.
• Additionally, selling and distribution expenses rose by 12.47%, climbing to N4.3 billion from N3.8 billion in the previous year’s period.

Amid these financial pressures, the company successfully mitigated its foreign exchange losses, reducing them to N5.8 billion from a staggering N42.5 billion reported during the same period last year.

• Furthermore, the company turned around its operating performance, recovering from the previous year’s operating loss of N36.7 billion to achieve a modest operating profit of N48 million.
• Significantly, other income experienced a remarkable growth of 859.86% year-over-year, totalling N726.8 million, with rental income and scrap sales contributing N469.7 million and N500.2 million, respectively.

Consequently, the company managed to decrease its pre-tax loss from N35.1 billion in the prior year to N301.7 million for the period ending November 30, resulting in an impressive reduction of 99.1%.

Asset position 

In the latest quarter, the company reported total assets amounting to N173.9 billion, reflecting an impressive increase of 10.6% from N157 billion in the preceding quarter.

This growth is underscored by notable advancements in both non-current and current assets.

Non-current assets saw a modest rise of 0.16%, increasing to N49.69 billion from N49.61 billion.

• This growth was primarily driven by an enhancement in property, plant, and equipment at N14.9 billion.

• Notably, leasehold land and buildings constituted a substantial segment of this category, totalling N8.2 billion out of the N14.9 billion in property, plant, and equipment, underscoring the company’s ongoing investment in its physical infrastructure.

Current assets exhibited a surge of 15.6%, rising to N124.2 billion from N107.4 billion.

• This impressive growth was primarily fuelled by a significant increase in inventories, which soared by 31.5%, rising to N53.7 billion from N40.8 billion.

• Within this inventory, raw materials and consumables accounted for N19.3 billion, while finished goods and goods available for sale contributed N18.6 billion.