PZ Cussons has announced plans to sell its African subsidiaries, including those in Nigeria, as it grapples with foreign exchange challenges. This was revealed in the company’s preliminary results for the financial year ending 31st May 2024, published on its website.

According to the report, the parent company of PZ Cussons Nigeria is considering either a partial or full sale of its African operations to reduce exposure to the naira’s volatility, which has seen a devaluation of 70%.

The report stated: “Over the last 12 months, we have continued to make operational progress, achieving our strategic priorities despite facing macroeconomic challenges. Concurrently, we have taken important steps to transform our business and maximise shareholder value by refocusing our portfolio where we can be most competitive.

“The 70% devaluation of the Nigerian naira during the period significantly impacted our financial results. We have worked tirelessly to mitigate this, while continuing to serve Nigerian consumers who are facing unprecedented inflation and economic hardship.”

Regarding the potential sale, the company noted that it had received “a number of expressions of interest for our African business.” These expressions of interest highlight the strength of PZ Cussons’ brands and could result in a partial or full sale of its African operations.

“The favourable trends from the second half of FY24 have continued into the new financial year. We are progressing with our plans to sell St. Tropez and have received several expressions of interest in our African business, demonstrating the potential of our brands and people, which could result in either a partial or full sale.

“We remain confident in the long-term potential of PZ Cussons as a company with stronger brands in a more focused portfolio, delivering sustainable, profitable growth,” the company said.

PZ Cussons also highlighted a £107.5 million foreign exchange loss, which “primarily arose from the translation and settlement of USD-denominated liabilities in our Nigerian subsidiaries, driven by the 70% devaluation of the naira between 31st May 2023 and 31st May 2024.”

However, the company reported significant improvements in revenue within its UK Personal Care division, achieving double-digit growth for the year.

In September 2023, PZ Cussons announced its intention to buy out the remaining 26.73% minority shares in its Nigerian subsidiary at ₦21 per share. As of 31st May, PZ Cussons held a 73.27% stake in PZ Cussons Nigeria Plc, representing 2.90 billion shares worth ₦45.53 billion as of 18th September.

PZ Cussons Nigeria has been facing tough financial challenges, posting a ₦94.78 billion loss in the third quarter of the 2023/24 financial year, compared to a ₦11.21 billion profit in the same period in 2022. The company also recorded a ₦74.14 billion loss in the second quarter, resulting in a negative net asset position, as liabilities outweighed assets by ₦46.42 billion due to the naira’s depreciation.