Consumer goods company PZ Cussons Nigeria has reported a staggering net loss of N96.4 billion for the fiscal year ending May 31, 2024, according to its latest unaudited financial statements. The substantial losses have led the company to post a negative equity of N47.2 billion at the end of the fiscal year.

Despite achieving a 33.5% growth in revenue, reaching N152.2 billion compared to N114 billion in the previous fiscal year, PZ Cussons has been grappling with various macroeconomic challenges. High interest rates, exchange rate depreciation, and soaring inflation have taken a toll on the company’s margins.

The group reported a gross profit of N60.6 billion, an impressive 84% increase from the previous year’s N32.95 billion. However, a substantial exchange loss of N158 billion resulted in a negative operating margin, leading to an operating loss of N111.5 billion.

Consequently, PZ Cussons Nigeria posted a pre-tax loss of N109 billion, a stark contrast to the N20.46 billion pre-tax profit recorded in the 2022/2023 fiscal year. The group enjoyed a tax credit of N12.5 billion due to its losses, resulting in a net loss of N96.4 billion, compared to the N13.3 billion profit after tax posted in the previous fiscal year.

The net loss has wiped out the group’s N34.5 billion retained earnings, leading to retained losses of N53.6 billion at the end of the 2023/2024 fiscal year. This has resulted in a negative equity of N47.2 billion, even as the group faces potential delisting from the Nigerian Exchange (NGX).

PZ Cussons Nigeria’s cash and cash equivalents declined by 68% to N32.7 billion, primarily due to a negative cash flow of N87.3 billion generated from operating activities. The group’s borrowings from its parent company, PZ Cussons (Holding) Limited, surged to N59.8 billion, largely attributed to a $40.26 million non-interest loan facility and FX revaluation adjustments.

In September 2023, PZ Cussons (Holding) Limited announced plans to buy out the remaining 26.73% shareholding of PZ Cussons Nigeria and delist the company from the NGX. However, the Securities and Exchange Commission (SEC) declined the delisting request in March 2024, a move applauded by some minority shareholders.