In the 2023 fiscal year marked by policy turbulence in Nigeria, Cadbury Nigeria Plc – a major food and drinks manufacturing conglomerate has reported a pre-tax loss of ₦28.2 billion. This decline of 2269% from the previous year’s pre-tax profit of ₦1.3 billion can be explained by the net income registered in the company due to the Naira devaluation.
Revenue Surge But Foreign Exchange Woes
Cadbury Nigeria’s audited financial statement for 2023 revealed a robust revenue of ₦80.4 billion, a remarkable 46% growth compared to ₦55.2 billion in 2022. The company’s core revenue streams were beverages like Cadbury Bournvita and 3-in-1 Hot Chocolate leading the charge, amassing ₦52.2 billion in sales.
Other revenue contributors were confectionery products like Caramel, TomTom, Candy Candy Coffee, Clorets gum, Buttermint etc contributing ₦25.6 billion in revenue. Bournvita Biscuit, which debuted in the market last year brought in ₦609 million in sales.
However, the storm clouds gathered when the group encountered an ₦36.0 billion Net Finance/Income loss primarily due to Naira devaluation from the government’s foreign exchange windows harmonization policy. This setback translated into a Loss Before Tax of ₦28.2 billion and ultimately left the company with a Loss for the Year of ₦19.1 billion.
Here Are Key Financial Metrics For The Year
Contrasting Financial Year 2023 and Financial Year 2022:
- Revenue: A robust ₦80.4 billion, increased by 46% year-on-year.
- Cost of Sales: ₦63.0 billion, representing a 33% increase.
- Gross Profit: Impressive ₦17.3 billion, an increase of 124%.
- Selling and Distribution Expenses: ₦7.3 billion, up by 16%.
- Operating Profit: Impressive ₦7.9 billion, representing a 3957% surge.
- Net Finance (Cost)/Income: A disheartening loss of -₦36.0 billion, a 3362% downturn.
- Loss Before Tax: Sobering ₦28.2 billion, plummeting by 2269%.
- Loss for the Year: ₦19.1 billion, a 3374% decline.
- Earnings Per Share: -₦10.16, negative.
- Total Assets: A resilient ₦63.4 billion, grew by 6%.
Debt Restructuring and Shareholder Equity
Faced with this net loss situation Cadbury Nigeria is charting a new course towards sustainability by restructuring the debt as a strategic lifeline. The loan of $7.7 million owed to its principal shareholder, Cadbury Schweppes Overseas Limited, is to be converted to equity.
The move will bolster Cadbury Schweppes Overseas Limited’s shareholding in Cadbury Nigeria to 79.39%
The bottomline shows that Nigeria is still a good market for Cadbury, but the financial postings show how policy inconsistencies can be a threat to businesses and their survival in the Nigerian market.
Please Like 👍, Comment, Share & Follow us on our social media handles.
WhatsApp Channel
Telegram Channel
