PZ Cussons Nigeria Declares N123 Million Loss In Q1’17/18 Result

PZ Cussons Nigeria Plc has released its first Quarter of 2017/2018 results, showing a loss after tax of N123 million, behind an after-tax earnings estimate of N695 million, predicted by the research unit of CardinalStone Partners.

The results released on Tuesday, October 3, showed that PZ turnover rose by 12.8% Year on Year to N18.9 billion, outperforming an estimate of N17.9 billion (+5.8% deviation), predicted by the research unit of CardinalStone Partners.

While the turnover of the company was most likely price driven, it is believed that the turnover came from its Home and Personal Care segment as demand for its electrical brands remain hampered owing to subdued consumer purchasing power.

PZ Cussons operating margin contracted by 357bps Year on Year, as a result of a 281bps Year on Year decline in gross margin (despite improved FX availability at the interbank market), as well as a 58bps Year on Year increase in operating expenses to sales ratio to 21.9%.

The company continued to report FX losses (Q1’17/18: N1.8 billion; Q1’16/17: N4.7 billion) on its foreign currency denominated trade payables, which largely weighed on earnings for the quarter.

The development means that PZ reported a loss after tax of N123 million, lower than N1.6 billion loss reported in Q1’16/17 and weaker than N2.1 billion recorded in Q4’16/17 respectively.

N‘billion
Q1’17/18
Q1’16/17
YoY
CSP Est.
% Variance
Revenue
18.9
16.8
12.8%
17.9
5.8%
Cost of Goods Sold
(12.9)
(11.0)
17.6%
(11.7)
10.0%
Gross profit
6.0
5.8
3.6%
6.1
-2.3%
SGA Expenses
(4.1)
(3.6)
15.9%
(4.3)
-3.9%
Other Income
0.0
0.1
-45.8%
0.1
-65.3%
Finance cost (Net)*
(2.1)
(4.7)
-56.0%
(0.9)
131.6%
PBT
(0.2)
(2.4)
N/M
1.0
N/M
Taxation
0.1
0.8
N/M
(0.3)
N/M
PAT
(0.1)
(1.6)
N/M
0.7
N/M
Q1’17/18
Q1’16/17
Gross profit margin
31.7%
34.5%
Operating Profit margin
10.0%
13.5%
PAT margin
N/M
N/M
*Net finance cost includes exchange losses

The quarterly breakdown of PZ’s result is shown below;

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N‘billion
Q1’17/18
Q4’16/17
QoQ
Revenue
18.9
22.5
-15.9%
Cost of Goods Sold
(12.9)
(13.8)
-6.2%
Gross profit
6.0
8.7
-31.3%
SGA Expenses
(4.1)
(3.7)
12.8%
Other Income
0.0
0.1
-37.9%
Finance cost (Net)
(2.1)
(2.6)
-22.0%
PBT
(0.2)
2.5
N/M
Taxation
0.1
(0.4)
N/M
PAT
(0.1)
2.1
N/M
Q1’17/18
Q4’16/17
 
Gross profit margin
31.7%
38.8%
Operating Profit margin
10.0%
22.7%
PAT margin
N/M
N/M




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