PZ Cussons records N181m PBT loss in Q1 2018
Shareholders of Cussons Nigeria Plc may have stated reconsidering their investment in the firm, following release of the company’s first quarter 2018 result for the period ended 30th August, 2017.
The result released by the Nigerian Stock Exchange (NSE) on Tuesday, showed that while sales grew by 12.8 per cent y/y to N18.9million, the bottom line showed losses of N181m and N61m on the Profit before tax (PBT) and profit after tax (PAT) lines respectively.
Following the result, PZ has delivered topline growth for 4 consecutive quarters since Q1 2017. This suggests that management may have found a winning formula for its price-volume mix.
The result showed that gross margin contraction of 281bps y/y to 31.7 per cent comes may have manifested as surprise given that the last time there was a contraction in gross margins was in Q4 2016.
According to the result, though, operating expenses was 15.9 per cent higher y/y, it was the foreign exchange loss of N1.8bn during the quarter that impacted the bottom-line more, 61.8 per cent lower than the 4.7billion loss declared in prior year.
Sequentially, PZ Cussons sales fell by -15.9 per cent q/q, while gross margin contracted by -710bps q/q. Opex rose by 12.8% q/q while other operating income declined by -37.9% q/q. Both bottom line losses compare with PBT and PAT of N2.5bn and N1.8bn in Q4 2017. Compared with our estimates, sales are in line, but we had expected underlying PBT and PAT of N2.7bn and N1.7bn respectively.
The annualized Q1 2018 sales are -11.4 per cent behind FBNQuest research consensus FY 2018 sales estimate. PZ shares have gained 79.3% ytd against 31.9 per cent ytd for the ASI
Turnover N18, 898,968bn, while in the first quarter ended 30th August, 2016 closed at N16, 762,793bn reflecting 12.81 per cent increase.
Operating profit declined by 16.16 per cent to N1, 853,269bn from N2, 210,379bn.
Profit/ loss for the period remarkably by 92.55 per cent, from N2, 431,122bn recorded in 2016 financial year, to N181, 005m.
Bonny Amadi
