Emerging market FX weakness has impact on profits at PZ Cussons

10th Apr 2014 07:01

- Trading conditions 'challenging' in most markets- Currency movements affecting results in emerging markets - Input costs on an 'upward trend'Consumer products group PZ Cussons said that trading for the third quarter was in line with expectations and full-year forecasts remain unchanged, though conditions in most markets remain 'challenging'.The company, which owns brands such as Carex, Charles Worthington and Imperial Leather, noted a "competitive trade environment in developed markets and weakening currencies adding to the cost base of both consumers and businesses in emerging markets". It also said that some raw material input costs have shown an "upward trend" during the quarter.Trading from region to region was rather mixed, with improvements noted across Europe, but results affected in Asia and Africa.In Asia, PZ Cussons said profits in Australia and Indonesia have been affected by a weaker local currencies in both markets, despite an improving brand performance.In Africa , unrest in north Nigeria has resulted in "some disruption" during the period. "Economically, interest rates have been maintained at a high level reducing liquidity in the trade whilst the naira has come under pressure ahead of a change in the central bank governor in June," the firm said. Meanwhile, profits in Ghana have been affected by the weakening in the cede."Looking ahead, the group is focussed on a dynamic and fast brand renovation and innovation programme, an ongoing cost reduction programme and successful delivery of new areas of growth such as Rafferty's Garden and the Wilmar joint venture," the company said. "These initiatives will help counter the ongoing macro challenges and the reduction in profits from Poland as a result of the homecare sale."BC