Cost saving initiatives lifts PZ Cussons Nigeria half-year profit

PZ Cussons Nigeria Plc, the maker of a wide range of consumer goods, said that half-year profit for period ending 30th November 2018 grew by 107% to N1.22bn from N589.5m, helped by cost management initiatives and improvement in net finance costs.

The company saw a 48% drop in administrative expense to N1.98bn from N3.8bn in the previous year. Net finance cost declined by 119% to N95m from N501m in the previous year, boosted by improvement in foreign exchange loss by 80%.

The firm said that net revenue in the period declined by 15% to N35bn due to weak consumer demand. In a profit warning update issued in early December by PZ Cussons Plc, the British parent company, it noted that prices, volumes and margins in Nigeria remained under pressure. As a result, it was focusing on optimizing price points and pack sizes across key brands in the portfolio.

It also happily reported that its Nutricima dairy business, which had been loss making had reached a break-even point.

Looking forward to the rest of the year, the company said it expects trading conditions to remain subdued as it continues to actively manage and review its portfolio to ensure that it mitigates short term volatility and is best placed for when growth returns to the market.

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