PZ Cussons Cuts Dividend to N596m on Lower Profit After Tax

By Goddy Egene

PZ Cussons Nigeria Plc is to pay lower than dividend to shareholders for the year ended May 30, 2018, following a decline of 44 per cent in  the company’s profit after tax (PAT).  Unlike last year when shareholders shared N1.985 billion or 50 kobo per share, they will share N595.572 million or 15 kobo this year.

According to audited results of the company just released, revenue stood at N80.553 billion, up by 3.0 per cent from N78.216 billion recorded in 2017.  Cost of sale rose from N50.267 billion to N56.097 billion, bringing the gross profit to N24.455 billion compared with N27.947 billion the previous year.

Sales and distribution costs equally went up to N9.601 billion from N9.095 billion, while administrative expenses hit N6.626 billion compared with N5.637 billion in 2017.  Net financing cost increased significantly by 234 per cent to N652 million, from N195 million in 2017.

Consequently, profit before tax fell 52 per cent to N2.313 billion from N4.811 billion, the decrease in PAT was lower due to 66 per cent reduction in taxation, which was N386 million in 2018 compared with N1.125 billion in 2017. As a result, PZ Cussons posted PAT of N1.927 billion in 2018, showing a decline of 44 per cent compared with N3.686 billion in 2017.

Hence, the directors recommended a lower dividend of 15 kobo, which is 70 per cent lower than the 50 kobo paid the previous year.

Explaining the performance, Chairman of PZ Cussons Nigeria Plc, Chief Kola Jamodu said  the weaker revenue growth, increased operating expenses due to inflation resulted in a reduction in  the group’s PAT.

According to him, there have been no structural changes in the landscape of the segments in which the company operate and the market share of its brands remain strong.

However,  he said to buttress and sustain  the position of the company in the market, improve  efficiency and improve performance of the business into the future, a number of initiatives are being implemented.

They include: a further streamlining and optimisation of product portfolio to bring more focus on key brands and categories and restore margins; optimisation of  the operating model  to reduce overheads as well as improve the speed at which new products are brought to the market and a review of  product costs across all categories with a focus on areas such as packaging reduction and a drive to reduce plastic consumption,” Jamodu said.