FOREX LOSS KNOCKS OUT PZ CUSSONS

Household goods manufacturer, PZ Cussons Nigeria PLC was deprived of rather deserved profit in the first half to November 30 by loss emanating from Naira depreciation.

According to figures for period released last week,  PZ Cussons had done all it could to grow income in these times and keep costs within limits but alas, it recorded N425.2m loss after losing N4,938.2bn in forex related operations.

Its total income had grown by 9.21% to N33670m as core revenue 8.76% increase to N33302.2m was further boosted by leap in interest income to N259.4m from N76.8m and in spite of 19.6% drop in other income to N108.4m.

These income achievements were further boosted by 2.08% drop, not increase in cost of sale to N21,834.4m.

Lastly, the resultant 37.8% growth in gross profit  ended far ahead of 2.36% and marginal 0.73% growths in Selling and distribution and Administration costs to N4412.9m and N2708.6m respectively.

In other words, forex loss for the period was almost twice the cost of administering the company and also more than cost of distribution and selling.

Then to cap the good news at almost every corner, the growth in interest income occurred  while interest cost declined by 47.1% to N200.9m.

With the N425.2m loss compared to N1152.6m profit at the same time previously, it lost N1.26 on each N100 income compared to N0.49 gain hitherto.

Whats more, more forex loss may mount in second half because the first half's dive into loss, actually occurred in the second quarter after a very profitable first quarter.

PZ CUSSONS Nm Haldonear.
                     Nov 2015.    Nov 2016
Total inc.    33670.0.        30831.4
Core inc.     33302.2.        30619.8
Cost of sale 21834.4.       22297.7
Gross profit 11467.7          8322.2
Distribution   4412.9.          4311.0
Administration 2708.6.       2689.0
Other income     108.4.          134.8
Forex gain.     (4938.2).        (1.38)
Interest inc.      259.4.           76.8
  ". Cost.            200.9.          379.9
Profit b4 tax   (425.2).        1152.6
Margin %          (1.26).           0.49

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