Lagos, Feb. 21, 2024: PZ Cussons Nigeria Plc has recorded a loss of N74.14 billion in its Profit After Tax(PAT) of 2023 second quarter ended Nov. 30, 2023.
This indicated 1,067 per cent decrease in the quarter under review, as against N7.7 billion profit recorded in the corresponding quater of the year 2022.
Ms Olubukola Olonade-Agaga, the
Company Secretary said this in a notification of the position of the company’s unaudited financials sent to the Nigerian Exchange Ltd (NGX) on Tuesday in Lagos.
Olonade-Agaga stated that the ongoing depreciation of naira and decrease in the company’s volumes of approximately six per cent overall was responsible for the loss.
She said that the company, in addition also had a foreign exchange loss of N87 billion on its foreign currency-denominated trade obligations, which negatively impacted on its operating result.
According to her, the operating loss is the key driver of the company having a negative total equity position of N23.2 billion as at the quarter under review.
The company secretary said the Group’s financial liabilities, most of which are denominated in foreign currencies stood at N178 billion, as against N118 billion posted in the same quarter of year 2022.
Olonade-Agaga revealed that the Group’s total assets stood at N155 billion in the quarter under review, compared to N166.4 billion recorded in the corresponding quater of the previous year.
” Following further devaluation of the naira post Nov.30, 2023, it is expected that the Group will incur further material foreign exchange losses in relation to liabilities denominated in foreign currencies.
“These will be reflected in future results and will likely result in a worsening of the current negative net asset position.
“Our payables denominated in foreign currencies have increased significantly in recent years, primarily as a result of our inability to source foreign currency to repay our suppliers and other providers of credit.
“We have benefited from extended payment terms and other support from our affiliated companies, and as a result,the majority of our trade payables are owed to other members of the PZ Cussons group,” she said.
According to her, the company has been examining a number of options to address its current situation.
She said the firm would hold an Extraordinary General Meeting(EGM) on March 13 to enable its shareholders and directors propose and consider the options available to the company to deal with its ongoing negative net asset position.
The company secretary hinted that the Board of Directors had continued to recommend the offer from the company’s core shareholders to buy out its minority shareholders and de-list the company.
She disclosed that the offer was increased from N21 to N23 per share as announced on Nov.9, 2023.
“The proposed scheme is intended to enable the core shareholders to significantly simplify and strengthen the company’s operations to allow it to return to longer-term growth.
“The company filed an application with the Securities and Exchange Commission (SEC) in November 2023 for its no-objection to the proposed scheme.
“We are still awaiting SEC’s no-objection in order to convene a meeting for shareholders to vote on the proposed scheme.
“If the company is not able to obtain the requisite regulatory and shareholder approvals to proceed with the proposed scheme, the company will be required to explore with its creditors, which are primarily members of the PZ Cussons group.
“On ways to address its negative net asset position and repay or settle outstanding amounts owing to its creditors,” she said.
According to her, this could include measures such as equity issuance, debt for equity conversion, rights issues, asset sales or similar.
Olonade-Agaga further said that such measures may significantly dilute or otherwise impact existing shareholders.
