In response to the prevailing macroeconomic challenges in Nigeria, PZ Cussons Plc has announced a comprehensive review of its operations. The multinational company, with a significant presence in Africa, Europe, the Americas, and the Asia-Pacific region, is strategizing to navigate through the complexities impacting its business in Nigeria.
Jonathan Myers, the CEO of PZ Cussons, highlighted the company’s commitment to enhancing shareholder value by transforming its portfolio. The decision comes in the wake of the company’s trading update for the third quarter ended March 2024, which underscored the need for strategic adjustments amidst the evolving economic landscape.
Despite facing headwinds in Nigeria, PZ Cussons reported improved like-for-like (LFL) revenue growth in Q3, driven by distribution gains and successful marketing initiatives. However, the devaluation of the Nigerian Naira by an average of 60% compared to the previous year significantly impacted reported FX rates, leading to a decline in revenue.
To mitigate the effects of foreign exchange-driven cost inflation, PZ Cussons has implemented price adjustments while focusing on improving profitability and cash generation. The company emphasized the importance of remaining competitive amid significant volatility in the Naira.
Furthermore, PZ Cussons disclosed its efforts to repatriate cash from Nigeria, with approximately £35 million already repatriated and an additional £15-20 million expected by the end of May. This move follows fiscal policy changes in Nigeria and operational initiatives aimed at enhancing the Nigerian business’s self-funding capabilities.
In light of the challenges faced in Nigeria, PZ Cussons has decided to streamline its portfolio to focus on areas where it can achieve sustainable growth and superior returns. The company acknowledges the complexity of its operations in Nigeria and aims to allocate resources more effectively to enhance competitiveness.
Earlier attempts by PZ Cussons Nigeria Plc to acquire the shares of minority shareholders were declined by the Securities and Exchange Commission (SEC), which would have led to the delisting of the company from the NGX.
In conclusion, PZ Cussons remains committed to navigating through Nigeria’s macroeconomic challenges by implementing strategic initiatives to transform its portfolio and enhance shareholder value. The company’s proactive approach underscores its resilience and determination to thrive in dynamic business environments.
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