Cadbury Nigeria Plc has reported a loss of N27.63 billion in the fiscal year 2023, marking a significant decline of 2,228% from the N1.30 billion pre-tax profit recorded in FY 2022.
The company reported a revenue of N80.38 billion in 2023, representing a 46% increase from the N55.21 billion posted in 2022. With an operating profit of N8.40 billion in 2023, the company recorded a net finance cost of N36.03 billion, leading to a loss before tax of N27.63 billion.
Key Highlights: FY 2023 (FY 2022, % Change)
- Revenue: N80.38 billion, (N55.21 billion, +46%)
- Cost of Sales: N62.59 billion (N47.49 billion, +32%)
- Gross Profit: N17.79 billion (N7.72 billion, +130%)
- Operating Profit: N8.40 billion (N194.06 million, +4227%)
- Net finance (cost)/income: -N36.03 billion (N1.10 billion, -3362%)
- (Loss)/Profit before tax: -N27.63 billion (N1.30 billion, -2228%)
- (Loss)/Profit for the period: -N27.63 billion (N583.1 million, -4839%)
- Total assets: N55.36 billion (N59.71 billion, -7%)
What you should know
Majority of the company’s revenue came from its refreshment beverages (Bournvita and 3-in-1 Hot Chocolate), where it recorded a revenue of N53.87 billion, followed by its confectionary products (Tom Tom, Buttermint, Candy Caramel, Candy Coffee and Clorets gum) which produced a turnover of N20.69 billion. Bournvita Biscuits produced a revenue of N1.23 billion.
Despite the impressive revenue showing, the company suffered immense losses due to the Naira revaluation which occurred in mid-2023. While the company’s interest expense on borrowings appreciated by 170% to hit N1.36 billion from N503 million in 2022, comparatively, it was dwarfed by the N36.93 billion cost accrued due to exchange rate differences in 2023.
Due to the staggering comprehensive loss recorded in 2023, Cadbury Nigeria posted a negative equity of N15.08 billion in 2023, down by 213% from the N13.30 billion equity posted in 2022. Negative equity typically describes a situation where the total outstanding obligations or debts of a company are greater than the total value of the company’s assets.
The negative equity posted in 2023 has moved Cadbury Nigeria to convert its outstanding $7.7 million loan payable to its major shareholder, Cadbury Schweppes Overseas Limited to equity. The move seeks to increase Cadbury Schweppes Overseas’ equity in Cadbury Nigeria to 79.37%, from the present 74.97%. However, the move by the company’s board is still awaiting the shareholders’ approval.
Since the announcement of the debt-to-equity proposal by Cadbury Nigeria on January 9, the company’s share price has appreciated 39%, closing at N22.95 on January 26.
