PZ Cussons Nigeria Plc, makers of a wide range of consumer products including electricals, personal and homecare products, dairy brands, among others reported a loss of N123m in the first quarter of its 2018 financial year ending on 31 August 2017.

The company blamed its poor performance on higher cost of sales, driven by foreign exchange loss of N1.8bn. Cost of sales rose 17.6% to N12.9bn, while administrative expenses skyrocketed 42% to N1.87bn.

The company also saw a higher interest cost of N348m, from N94m in the previous year and a 28,000% jump in net finance cost to N273m, driven by higher cost of sales, (in part driven by FX) and the FX impact on financing costs.

Despite the challenges, the company posted an impressive 12.8% growth in sales to N18.9bn.

While commenting on the Nigerian unit’s results, the British parent company of PZ Cussons Nigeria Plc, said that the Naira has been stable against the US dollar on the interbank market and has strengthened slightly on the secondary market as a result of improved dollar liquidity levels. However, naira credit availability in the trade has tightened in recent months and the environment for consumers remains challenging following the very significant cost inflation of recent years.

The firm said that the Nigerian unit performed well in the personal care, home care and the PZ Wilmar joint-venture, but has seen more difficult trading conditions in the bulk milk category due to competitor pricing pressure and in electricals which is reliant on discretionary spending affordability. The company adds that it is undertaking several initiatives including business expansion and new product launches for the remainder of the year to continue to improve performance as the business enters peak season.