PZ Cussons sees 10% drop in Q4 revenue on pandemic impact, proposes N397m dividend for shareholders

The board of PZ Cussons Nigeria, a consumer product giant, has proposed the payment of N397.04 million, representing 10 kobo per share, to its shareholders for the full year ended May 2020.

The company, in a statement issued on Thursday and signed by Jacqueline Ezeokwelume, the company secretary, said if the dividend is approved by shareholders at the 72nd annual general meeting on January 29, the payments will be made on February 1, 2021.

Only shareholders whose names appear on the register of members and transfer books at the close of business on October 19, 2020 will receive the dividend.

Commenting on the company’s performance during the year, Gbenga Oyebode, chairman of PZ Cussons Nigeria, said activities of the company were disrupted especially in the second half of its financial year, as a result of the decline in oil prices and the impact of COVID-19.

“We have seen a contraction in our home and personal care (HPC) brands, resulting in price reductions and discounting and ultimately lower margins. In our electricals business, we saw a stable revenue performance but a decline in profits due to higher costs arising from logistics,” he said.

“Revenue in the first nine months of the year was stable compared to last year, but worsened in the last quarter of the financial year as a result of COVID-19 which led to the closure of the open markets.”

PZ Cussons’ consolidated revenue declined by 10 percent from N74.3 billion in full year 2019, to N67 billion in 2020, while profit before tax declined to a loss of N7.2 billion from N1.15 billion in 2019.

“The loss for the year was largely attributable to decline in sales in its home and personal care categories as a result of pricing and promotional pressure of N3.4 billion, which accelerated in fourth quarter as a result of COVID-19 and associated restrictions in the country which led to further sales volume decline,” Oyebode said.

“Other factors contributing to the annual loss include additional port clearing charges of N0.7 billion; an exchange loss of N1 billion arising in Q4 from the devaluation of the naira from N360/$1 to N380/$1; factory under-recoveries of N1.1 billion due to lower production, and the impact of group charges of N2.2 billion arising in the year.

“These charges relate to the costs incurred in running our current SAP system and other IT-related services provided. The overall top and bottomline results were disappointing, but our focus on liquidity delivered strong net cash position of N10.7 billion. This reflected efforts to prioritise trade receivables and a reduction in stocks generally.”