Cadbury Nigeria Record 65% loss surge
One of Nigeria’s leading beverage company, Cadbury Nigeria Plc, known for its iconic product Bournvita, reported a 65% increase in pre-tax losses for the first nine months of 2024, amounting to N16.93 billion. Cadbury Nigeria Record 65% loss surge, this is a significant jump from the N10.24 billion loss recorded in the same period last year. The company’s financial challenges have been attributed to rising finance costs and increased operational expenses, despite a notable rise in revenues.
Revenue Growth Vs. Rising Costs
Within the first nine months ending September 2024, Cadbury Nigeria saw its revenue surge by 51% to N89.52 billion, compared to N59.2 billion during the same period in 2023. However, this growth in revenue was overshadowed by a steep increase in costs.
Key financial highlights for the period include:
- Revenue: N89.52 billion (up 52% year-on-year)
- Cost of Sales: N74.76 billion (up 74%)
- Gross Profit: N14.76 billion (down 9.44%)
- Operating Profit: N6.24 billion (down 35%)
- Net Finance Cost: N23.18 billion (up 17%)
- Pre-Tax Loss: N16.93 billion (up 65%)
- Loss After Tax: N11.85 billion (up 16%)
- Earnings Per Share (EPS): -N520 kobo
Challenges in the Third Quarter
In the third quarter of 2024, Cadbury’s revenue grew to N38.08 billion, a notable increase from N23.59 billion in Q3 2023. However, the cost of sales consumed a whopping 86% of this revenue, amounting to N32.91 billion, nearly double the N17.5 billion spent on cost of sales in the same quarter last year.
The company faced a sharp decline in gross profit, which fell to N5.17 billion from N6.07 billion in Q3 2023. Additionally, finance costs, which were previously a net gain of N719 million in the third quarter of 2023, shifted to a substantial cost of N4.5 billion in Q3 2024. This resulted in a pre-tax loss of N3.05 billion, compared to a pre-tax profit of N4.29 billion in the same period last year.
Debt Forgiveness & Forex Challenges
Despite efforts to stabilize its financial position, Cadbury Nigeria continues to face challenges related to currency devaluation. The company’s Board of Directors announced a $20 million debt forgiveness from CSOL out of the $40 million it received earlier in 2024. This move was deemed necessary due to the sharp devaluation of the Naira, which dropped from N911.68 in December 2023 to over N1,400 in January 2024 against the US Dollar.
Segment Performance
- Refreshment Beverages: Generated N53.35 billion in revenue.
- Confectionary Sales: Contributed N25.71 billion.
- Intermediate Cocoa Products: Revenues surged by over 200%, from N3.2 billion to N10.45 billion.
Despite these gains, Cadbury Nigeria’s profitability remains under pressure due to escalating costs and financial liabilities. The company is exploring various strategies to optimize its operations and manage its debt obligations amidst ongoing economic challenges.
 for the first nine months of 2024, amounting to N16.93 billion.){kind=link}