Nigeria Depreciating Naira Drags PZ Cussons Nigeria into First Loss Since 2020

PZ Cussons Nigeria reported its first annual loss since 2020, with a N76 billion deficit for the year ending May 2024. The loss was driven by a 3,000% surge in foreign exchange losses due to naira depreciation, significantly impacting the company's financial stability and increasing liabilities.

PZ Cussons Nigeria, a key player in the country's consumer goods market, has reported its first annual loss since 2020. For the financial year ending 31 May 2024, the company recorded a loss after tax of N76 billion, primarily driven by a staggering 3,000% surge in foreign exchange losses, which rose from N5 billion to N157.9 billion.

The devaluation of the naira, following decisions by Nigeria's monetary authorities to align the official exchange rate with the parallel market, has significantly impacted the company's financial standing. PZ Cussons Nigeria, heavily reliant on imports for raw materials, saw its current liabilities increase to N119.3 billion, with trade payables reaching N90.6 billion.

The weakening naira has exacerbated the company's financial difficulties, as it generates revenue in naira but pays its international obligations in foreign currencies. The company also reported a negative asset position, with shareholders' funds turning negative at N23.2 billion.

Despite being the largest and most diverse market for PZ Cussons globally, the challenges posed by the naira's depreciation have placed considerable strain on the company's financial health.