PZ Cussons has revealed plans to sell its African subsidiaries as the company grapples with severe foreign exchange issues and a staggering 70% devaluation of the Nigerian naira.
The company is considering a partial or full sale to reduce its exposure to currency fluctuations that have significantly impacted its financial performance.
In its preliminary results for the year ending May 31, 2024, the parent company of PZ Cussons Nigeria disclosed that it had received several expressions of interest for its African businesses, indicating the strong potential of its brands.
The company sees this move as a strategic step to mitigate the ongoing naira crisis, which has severely affected its Nigerian operations.
Despite the challenges in Africa, PZ Cussons reported that its UK Personal Care business saw a profitable, double-digit revenue growth for the year.
The company highlighted its commitment to transforming its portfolio by focusing on markets where it can be most competitive.
“The last 12 months have seen continued operational progress, even as we navigated significant macro-economic challenges,” the company stated. “The naira’s devaluation by 70% has had a profound impact on our financials, but we’ve worked tirelessly to serve Nigerian consumers facing unprecedented inflation.”
The impact of the naira’s devaluation led to a £107.5 million foreign exchange loss for the group, primarily due to the settlement of U.S. dollar-denominated liabilities within its Nigerian subsidiaries.
In addition to the forex crisis, PZ Cussons Nigeria posted a ₦94.78 billion loss in the third quarter of 2023/24, a dramatic reversal from the ₦11.213 billion gain in the same period of 2022.
PZ Cussons remains optimistic about its long-term prospects, pointing to strong performances in other areas of its business.
The company is also moving forward with plans to acquire the remaining 26.73% minority shares in its Nigerian subsidiary, further solidifying its commitment to streamlining and refocusing its global operations.
