Recently, PZ Cussons Nigeria plc, the largest subsidiary of the PZ Cussons global group, released its third-quarter (Q3) results to investors at the Nigerian Stock Exchange (NSE).
The consolidated statement of profit or loss and other comprehensive income for the period ended February 28, 2015, show just 0.56 percent increase in revenue at N52.889 billion from the prior period of N52.594 billion. In the audited 2014 result, the company reported revenue of N72.905 billion.
In the last century, PZ Cussons Nigeria plc developed a deep understanding of the Nigerian markets, its consumers and general landscape which enable the company to develop and market leading brands that touch the life of its consumers, day after day.
The Q3 result shows 67.09 percent decline in interest income to N150.778 million as against N458.200 million in the preceding period.
PZ Cussons Nigeria plc vision is to profitably grow its business, strengthen its product portfolio, enhance the lives of its employees, consumers and all other stakeholders, by living and breathing its shared values, everyday.
Also in the same Q3 period, the company’s profit Before Tax (PBT) declined by 22.85% to N3.991bn from Q2’15 level of N5.174bn. Profit after tax (PAT) dipped by 27.91 percent to N2.787 billion from N3.866 billion in Q2’15.
The company’s basis Earnings per Share (EPS) dipped by 27.91 percent to 70 kobo from 97 kobo in Q2’15. The company’s share price opened this week’s trading at N24.43.
Despite that PZ Cussons Nigeria plc declared an interim dividend of 20 kobo which implies a dividend yield of 0.78 percent in the Q3’15 period, financial analysts at FBN Capital rated the stock underperform, noting that their “estimates are under review”.
Kingston Nwosu and Uwadiae Osadiaye, both analysts FBN Capital Limited in their first reaction shortly after PZ Cussons Nigeria Q3 result was released to investors at the NSE, said: “PZ shares are trading on a 2015E P/E multiple of 28.6x for 0.9 percent EPS growth in 2016E. The shares have outperformed the NSE ASI YtD with a gain of 8.0 percent (ASI: -15.6%). On the back of these results, we would expect a pull back.”
“Although we cannot draw any significant conclusions at this time, we believe the improved topline may be a signal that the company might be achieving some success in its distribution and marketing strategies. We await management’s comments nonetheless,” the analysts said.
The company record 7.34 percent increase in distribution/administrative and other expenses in the Q3’15 period to N10.349 billion as against Q2’15 period of N9.641 billion. Its Q3 interest cost was high by 57.89 percent to N270.647 million from N171.411 million.
According to the analysts, “as to the near-term outlook, crude palm oil (CPO) prices were flat during Q3 and are down 7 percent quarter-to-date. These factors should ordinarily have a positive impact on the company’s operations. However, headwinds in the form of naira depreciation and continued security challenges are likely to offset these positives. As such, we expect consensus estimates to be revised downwards.”
PZ Cussons Nigeria plc has enjoyed tremendous business successes in Nigeria for over a century and has understandably established unrivaled consumer loyalty to its wide range of products over this period.
The company prides itself to have adopted a Strategic Business Units (SBU) structure to relentlessly focus and drive them towards achieving profitable growth in all our product categories.
Iheanyi Nwachukwu
