PZ Cussons Nigeria earns revenue and multiplies profit to N6.4 billion in 2022

PZ Cussons Nigeria Plc reaped strong gains on the profit side which increased the group’s profit by around four times to N6.4 billion in its 2022 financial year ending in May. It is a second-year sustained recovery for the consumer goods manufacturing and marketing company after losing more than N7 billion in its 2020 financial year.

The company’s unaudited annual results report for the financial year shows a 278% increase in net profit, from around N1.7 billion at the end of its 2021 financial year.

The largest inflow that led to the rise in profits was other income, which was driven by an apparent windfall from profits made on disposal of fixed assets, amounting to N5.7 billion. Revenues are 174% above the corresponding figure for the previous financial year. It also beats the N3 billion operating profit generated by the company for the year.

This is a repeat of the previous year’s record when other income also rose by more than 1,000% from N179 million to over N2 billion.

The second major revenue The recovery came from interest income which rose more than three and a half times to about 840 million naira, half of which was generated in the last quarter.

The third angle of the strong revenue performance the company achieved during the year is the group’s revenue which increased by 21% to more than 100 billion naira. This is a record stable sales growth for the company compared to a 23% increase recorded in the previous fiscal year.

It’s also a lasting change of direction after two years of declining revenue at the end of fiscal 2020. Sales gains over the past two years are the best records the company has achieved in terms of of group sales performance for many years.

PZ Cussons revenue is derived from the sale of a wide range of consumer products and home appliances. These include detergent, soap, cosmetics, refrigerators, air conditioners, among others.

The challenge for the business, however, is that cost of sales exceeded revenue by more than 27% to nearly N76 billion for the year. This left no room to convert revenue gains into gross profit. Of a N17.5 billion increase in revenue during the year, only just over N1 billion was added to gross profit.

Cost of sales represented an increased proportion of sales to 76% in 2022 from 72% in the prior year. Gross profit improved only moderately at 5% to N24 billion, a sharp slowdown from the 170% jump the previous year.

The foreign exchange loss remained huge for the company at over 4 billion naira for the year, although less than nearly 6 billion naira incurred in 2021. With the increase in operating expenses, the company closed the year with an operating profit of N3 billion. This represents a 158% increase from the previous year’s figure of less than N1.2 billion.

Strong increases in other income and interest income strengthened operating profit and propelled net income for the year.

PZ Cussons is enjoying a virtually debt-free balance sheet with its already insignificant financial outlay dropping from over N71m to N11m. This further boosted financial income, with net financial income increasing almost fivefold to over N828 million.

This is a further improvement from an 84% decline in financial expense in 2021, which saw the company move from net financial expense status to net financial income status at the end of this year.

The company earned 1.61 naira per share in fiscal 2022, a sustainable improvement from 37 kobo per share in 2021 and a loss per share of 1.82 naira in fiscal 2020.

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