PZ Cussons anticipates naira devaluation to adversely affect financial performance in 2024

Soap manufacturer PZ Cussons has stated that its financial performance for the year 2024 will be adversely affected by the “recent devaluation of the Naira” and further warning that profit will most likely decline.

The company expressed its concern in its latest financial result for the year ending May 31st, 2023, where it grew its revenue by 10% with pre-tax profit falling 4.2% to £61.8 million.

The statement read,

The company noted that its unchanged dividend for the year 2023 was a result of the naira devaluation and projects the policy to impact its performance in the near term.

The company noted that if it had calculated its profits using the exchange rate between July and August after the CBN unified exchange rates, its operating profit would have declined by £ 14.7 million to £58.6 million rather than the £73.3 million it reported.

However, the company noted it has grown its revenue for the third consecutive year amidst macroeconomic challenges in many regions where it operates.

Its Chief Executive Officer (CEO) Jonathan Myers said,

The company’s basic Earnings Per Share (EPS) dropped by 10.7% from 12.57p in the financial year of 2022 to 11.23p in 2023.

The company attributed the drop in EPS to the effects of tax charges from Nigeria and non-controlling interest.

The statement reads,

The company reported a cash flow of £ 69.9 million compared to the £ 58.0 million it reported in 2022.

However, the statement noted that unremitted built-up cash trapped in its Nigeria entity amounts to £200 million of which it is finding it difficult to repatriate.

The statement reads,