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.