PZ Cussons Plc, the parent company of PZ Cussons Nigeria, has concluded plans to sell its African subsidiaries, citing the depreciation of the Naira as the major reason.
Reviewing the company’s ‘Results for the year ended 31 May 2024’, Jonathan Myers, PZ Cussons’ Chief Executive Officer, said Nigerians are facing unprecedented inflation and economic difficulties, adding that the naira depreciation has significantly impacted the company’s financials.
In the operational year results,’ PZ Cussons said it is considering either partial or full sale, noting that the sale will reduce the company’s exposure to naira fluctuations.
According to the consumer goods manufacturer, the board has received multiple interests in the sale of its African business.
Commenting on the impact of the naira devaluation, PZ Cussons said a foreign exchange loss of £107.5 million “primarily arose from the translation and settlement of USD denominated liabilities in our Nigerian subsidiaries and is wholly the result of the devaluation of the Naira, which fell by 70% from 31 May 2023 to 31 May 2024”.
The further company stated: “The Group is currently engaged in a process to sell its St Tropez brand and is exploring potential transactions that could lead to a partial or full sale of its Africa business, having received a number of expressions of interest.
“A partial or full sale of the Group’s Africa business could materially reduce the Group’s exposure to fluctuations in the Naira exchange rate.
“The Board has committed to using any proceeds from these transactions to first reduce gross borrowings, and consequently the level of the Group’s net interest cost.”
In his remark, Myers said: “The period was marked by a 70% devaluation of the Nigerian Naira, which has had significant implications on our reported financials.
“We have worked hard to mitigate the impact of this on the Group, while continuing to serve Nigerian consumers who are facing unprecedented inflation and economic difficulties.”
Recall that in April, Myers said the company was reviewing its brands and geographies over macroeconomic challenges and complexities in Nigeria.