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Company Results

Cadbury Nigeria declares N172 million as profit in 2020

Cadbury Nigeria Plc declared a profit of N172 million in 2020, as domestic and export sales declined.



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Cadbury Nigeria Plc has declared in its recently published unaudited year-end financial statements, that it made a profit of N172 million at the end of its operation in 2020.

This is according to the information and figures contained in Cadbury’s un-audited year-end 31st December 2020 financial statements, published on the website of the Nigerian Stock Exchange.

The report revealed that the profit which Cadbury made in 2020, was 83.9% lower than the profit it made in 2019, as the company’s profit after tax declined from over N1.07 billion in 2019 to N172.7 million in 2020.

Key Highlights

  • Revenue decreased to N35.41 billion, down by 9.97% Y-o-Y.
  • Cost of sales decreased to N29.64 billion, down by 4.39% Y-o-Y.
  • Gross profit decreased to N5.77 billion, down by 30.73% Y-o-Y.
  • Other income increased to 108.04 million, up by 24% Y-o-Y.
  • Selling and distribution expenses decreased to N4.58 billion, down by 12.12% Y-o-Y.
  • Administrative expenses decreased to N1.18 billion, down by 35.25% Y-o-Y.
  • Operating profit decreased to N119.22 million, down by 91.19% Y-o-Y.
  • Net finance income decreased to N127.44 million, down by 31.21% Y-o-Y.
  • Profit for the year decreased to N172.67 million, down by 83.88% Y-o-Y.

Operational review

  • In line with the information contained in the report, the 9.97% decrease in the revenue of Cadbury Nigeria Plc in 2020 was occasioned by the decrease in domestic and export sales of the company, this decline went on to impact the profits of the Company in 2020.
  • It is important to understand that Cadbury’s profitability thrives on high volume and high revenue (-9.97%). However, the decrease in revenue without a more than proportionate decrease in Cost of Sales (-4.39) pressured the company’s prospects of posting an impressive profit last year, as gross profit declined by 30.73%.
  • This is logical as FMCG profit margins are usually rather slim, hence Cadbury, like every other player operating in the FMCG sector mostly employs a strategy focused on driving top-line sales (revenue) and by extension increasing market share.
  • Consequently, the impact of the COVID-19 on the Company’s sales pressured revenue in 2020, and this impacted profits significantly.

Omokolade Ajayi is a graduate of Economics, and a certificate holder of the CFA Institute’s Investment Foundation Program. He is a business analyst, and equity market researcher, with wealth of experience as a retail investor. He is a business owner and a stern advocate of Financial literacy, who believes in the huge economic prospect of the Nigerian Payment channels and Fintech space.

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Company Results

Zenith Bank spends N20 billion on IT in 2020, up 122%

Zenith Bank spent a whopping N20 billion on IT in 2020 more than double its 2019 spend of N9 billion. 



Nigeria’s largest bank by assets, Zenith Bank Plc, spent a whopping N20 billion on Information Technology in 2020, more than double its 2019 spend of N9 billion.  

A cursory view of the bank’s expense line for 2020 reveals that it spent N148.1 billion on other expenses compared with N129. 4 billion in the same period of the previous year. Information technology was the major driver of the bank’s expense line, making up about 15.5% of total operating expenses. 

Why this matters: Most banks are expected to record higher spend on information technology in 2020 due to forced work-from-home policies triggered by Covid-19. Apps such as Zoom, and Microsoft Teams went mainstream during the pandemic as most businesses increasingly depended on them to function. 

  • While remote working may have been a major contributor, the bank likely splurged heavily on software applications, cloud computing, SaaS, and investing in technology to drive its FinTech goals. 
  • Apart from Information Technology, the bank also spent more on AMCON levy during the year, incurring cost of N30.9 billion.  
  • A notable reduction in year-on-year expenditure was its spending on Hotels and Travels. The bank spent N1.8 billion in Travel and Hotels. 
  • Zenith Bank reported a record N230 billion in profit after tax for the year ended December 2020. The bank is now the largest bank by Total Assets, with over N8.4 trillion.

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Company Results

Dangote Sugar yearly revenue surge by 33%, announces a dividend of N1.50

Dangote Sugar Refinery Plc. recently declared a 33.0% Year to year growth in earnings to N29.8 billion for the financial year of 2020



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Dangote Sugar Refinery Plc via the Nigerian Stock exchange recently declared a 33.0% Year to year growth in earnings to N29.8 billion for the financial year of 2020

The company also announced a dividend of N1.50 (vs N1.10 total dividend in 2019).

Dangote Sugar’s revenue expanded by 33.0% YoY amid strong volume growth in its 50 kg sugar offering (c.96.0% of total sales).

The company’s impressive outing amazed a significant number of stock pundits despite a surge in tax charges which partially offset some of the positive passthrough from border closures on earnings.

Gross margin expanded by 1.31ppts Year to Year to 25.08%, which we believe points to the effects of recent cost-containment measures and the slump in global raw sugar prices in 2020 amid the COVID-19 pandemic.

The raw sugar price dropped to as low $0.09/lb in 2020 and traded c.$0.13/lb on average during 2020 (-4.38% YoY)

What you should know: Dangote Sugar Refinery Plc (the Company) was incorporated as a Public Limited Liability Company on 4 January 2005, commenced operation on 1 January 2006, and became quoted on the Nigerian Stock Exchange in March 2007. Its current shareholding is 68% by Dangote Industries Limited and 32% by the Nigerian public.

The principal activity of the Group is the refining of raw sugar into edible sugar and the selling of refined sugar. The Group’s products are sold through distributors across the country.

Deal book 300 x 250

That being said, in spite of such impressive results from the N217 billion valued company experienced a surge in operational cost partly due to persistent FX scarcity.

Dangote Sugar reported a four-fold increase in finance cost, which can be largely attributed to the foreign exchange loss in its ordinary business operations, driven by persistent FX shortages and naira repricing at the exchange rate windows.

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