PZ Cussons Nigeria Plc made a return to profitability that grew by more than 100 percent, thanks to the rare stability of the naira, which has reduced its foreign exchange-induced losses, the consumer brand’s unaudited financials show.
The personal care and household product maker recorded a net income of N10.07 billion, a sharp reversal from a N90.3 billion loss the previous year, as FX losses shrank dramatically amid stronger sales growth.
PZ Cussons’ revenue surged by 40 percent to N212.6 billion, up from N152.2 billion in 2024, buoyed by price adjustments and resilient demand for its brands.
Gross profit rose modestly to N57.7 billion from N54.1 billion, reflecting higher input costs in an inflationary environment.
The turnaround was underpinned by a collapse in FX-related losses. The company’s FX loss narrowed to N7.8 billion from N157.9 billion in 2024. This single line item had been the biggest drag on earnings last year when Nigeria’s mid-2023 exchange rate liberalisation triggered a sharp devaluation of the naira.
The policy shift, which saw the currency depreciate from about N450 per dollar to nearly N1,500 in the official market, forced corporates like PZ Cussons to revalue dollar-denominated obligations, swelling their losses.
With the naira relatively more stable in 2025, those translation losses ebbed. Average exchange rates for the year stood at N1,564.64 per dollar versus N997.20 a year earlier, with closing rates at N1,586.20. Though still volatile, the absence of another abrupt devaluation limited the hit on financial statements.
Operating performance
Operating profit came in at N18.9 billion, compared with a record N124.5 billion loss last year. Selling and distribution expenses rose to N17.9 billion from N13.2 billion, while administrative costs jumped by about 38 percent to N14.7 billion, underscoring inflationary pressures on wages, energy, and logistics.
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Other income dipped to N1.8 billion from N2.9 billion, while finance income fell sharply to N1.4 billion from N6.1 billion, reflecting lower returns on placements. Finance costs also moderated slightly, closing at N3.6 billion versus N4.1 billion.
On balance, profit before tax reached N16.7 billion, compared with a N122.5 billion pre-tax loss in 2024.
Balance sheet still pressured
Despite the return to profitability, the balance sheet remains strained. Total assets grew to N168.9 billion from N157.1 billion a year earlier, driven by higher current assets of N118.4 billion.
However, liabilities still outstripped assets. Total liabilities stood at N186.2 billion, leaving the group with a negative equity position of N15.6 billion, albeit an improvement from the N24.9 billion deficit last year.
Net debt improved to N30.6 billion from N60.2 billion, supported by higher cash balances of N40.7 billion, up from N28.9 billion. But borrowings remained elevated at N71.3 billion, mostly owed to its UK parent, PZ Cussons Holdings. The net-debt-to-equity ratio, though better, remained at a highly leveraged 1.96 times.
Trade and other payables also swelled, including related-party obligations of N80.3 billion, compared with N64.2 billion in 2024. The company’s reliance on group financing and trade credit highlights its tight liquidity environment amid a high-interest-rate environment.
Slowing FX losses lift earnings
The dramatic fall in FX losses underscores how macroeconomic policies ripple through corporate accounts. In June 2023, Nigeria scrapped its multi-tier exchange rate system in favor of a “willing buyer, willing seller” regime.
The move collapsed the naira, inflating FX liabilities across listed companies. For PZ Cussons, this translated into a N157.9 billion hit last year, wiping out profits.
In 2025, although the naira continued to weaken, the adjustment was less abrupt. The company also made greater use of deliverable forwards with the Central Bank of Nigeria (CBN), which helped smooth FX obligations. Its balance of deliverable forwards fell to N63 million from N4.5 billion in 2024, indicating reliance on alternative funding arrangements.
Management signaled confidence in sustaining the revenue growth momentum while tightly controlling costs. Still, risks linger.
Nigeria’s inflation remains above 20%, and currency volatility is far from over. With shareholders’ equity still negative, the company remains dependent on parental support.
PZ Cussons Holdings has previously waived intercompany debts — including a N14.3 billion waiver in 2024, reclassified as capital contribution.
The latest results show progress in repairing the balance sheet, but the path to financial resilience remains narrow. For investors, the critical question is whether the return to profit marks the beginning of sustainable growth or a reprieve in a still volatile macroeconomic climate.
