PZ Cussons, a British multinational consumer goods company, has announced plans to sell its African subsidiaries due to foreign exchange challenges.
PZ Cussons cited a 70 per cent devaluation of the Nigerian naira, which has greatly impacted its financials.
Despite operational progress and strategic initiatives, the macro-economic challenges have forced the company to consider a partial or full sale of its African business.
The company has received expressions of interest for its African subsidiaries, recognizing the potential of its brands and people.
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This move aims to maximize shareholder value and mitigate exposure to currency fluctuations.
PZ Cussons remains confident in its long-term potential, with a focused portfolio and stronger brands delivering sustainable, profitable growth.
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However, the naira devaluation has resulted in a foreign exchange loss of £107.5m, primarily due to the translation and settlement of USD-denominated liabilities in Nigerian subsidiaries.
The company’s United Kingdom (UK) Personal Care business has shown notable improvement, with profitable, double-digit revenue growth.
In September 2023, PZ Cussons showed interest in acquiring the remaining minority shares in its Nigerian subsidiary.
The company currently holds a 73.27 per cent stake in PZ Cussons Nigeria Plc.
Despite this, the Nigerian subsidiary has struggled, posting a N94.78bn loss in the third quarter of 2023/24, compared to a N11.213bn gain in the corresponding period in 2022.
The company’s liabilities have surpassed its assets by N46.420bn due to naira depreciation, leaving PZ Cussons in a negative net asset position.
It maintained that the sale of its African subsidiaries aims to address these challenges and ensure the company’s long-term sustainability.
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