By Dipo Olowookere
British conglomerate, PZ Cussons Plc, last Thursday said the closure of land borders by the Nigerian authorities was already impacting negatively on its performance.
An arm of the cosmetics and soap making firm, PZ Cussons Nigeria Plc, is listed on the Nigerian Stock Exchange (NSE), where its share price last Friday rose by 25 kobo or 5 percent to N5.25 per unit.
In a statement issued by PZ Cussons in the United Kingdom last week in respect of the half year to November 30, 2019, the firm blamed the decline in its first half revenue and operating profit on the “challenging market conditions across key geographies.”
In the statement obtained by Business Post at the weekend, it was emphasised that revenue from its African operations, which contributes more than a third to the group’s figures, “declined due to weakness in our mass market Home and Personal Care brands offsetting strong growth in Electricals.”
“Profitability was impacted by continued consumer pricing pressure, continuation of charges associated with the Port in Lagos and the closure of the borders limiting exports,” it added.
The company further stated that in Europe and the Americas, whilst Imperial Leather and Original Source continued to demonstrate market share growth, continuing consumer uncertainty and well-documented challenges in the UK high street adversely impacted overall revenue and profit.
“Results remained solid in Beauty with continued growth in retail sales of St Tropez in the USA,” it added.
PZ Cussons said its business in Asia Pacific further brought in good revenue and profit growth, especially in Indonesia as a result of high demand for Cussons Baby, offsetting lower revenue and higher promotional costs in Australia.
“The region was also adversely impacted by higher manufacturing costs related to raw materials and the strengthening of the Indonesian rupiah,” the statement noted.
However, the company said it expects a better second half if there are no further worsening of the economic and trading environments across its key geographies.
“Full year revenue and adjusted profit before tax is expected to be modestly below the prior year on a like-for-like basis,” it stated.
In August 2019, the federal government announced the closure of land borders, restricting importation and exportation of goods through land. However, it said goods can still be brought in or taken out through the air and sea.
The announcement came as a shock to many as there was no prior warning. Prices of goods have risen since then, causing inflation to increase from 11.24 percent in September to 11.61 percent in October. On Tuesday, the National Bureau of Statistics (NBS) is expected to announce the inflation numbers for November.
