Bournvita maker, Cadbury Nigeria Plc in the first nine months of 2024 recorded a 65% increase in pre-tax losses from N10.24 billion in the same period of 2023 to N16.93 billion in the period under review.
The company’s 2024 nine-month financial statement reveals that revenues rose by 51% to N89.52 billion from N59.2 billion in the corresponding period of 2023.
In the period under review, the company’s finance costs increased significantly, preventing profitability during the period.
Key highlight of the report
- Revenue- N89.51 billion, +52%
- Cost of sales- N74.76 billion, +74%
- Gross Profit- N14.76, -9.44%
- Selling and distribution expenses- N5.18 billion, -0.13%
- Result from operating activities- N6.24 billion, -35%
- Net finance cost- N23.18 billion, +17%
- Pre-tax loss- N16.93 billion, +65%
- Loss after tax- N11.85 billion, +16%
- Basic Earning Per Share (EPS)- (-N520)
In the quarter ending September 2024, the company’s revenue reached N38.08 billion- an increase from N23.59 billion.
However, the cost of sales gulped 86% of the company’s revenues at N32.91 in the third quarter of 2024. The figure is almost double the cost of sales for the third quarter of 2023 which stood at N17.5 billion.
- In the period under review, the company saw declines in its gross profit and also in its operating profit when compared to the third quarter of 2023. Gross profit in the period between July and September 2023 stood at N5.17 billion, from N6.07 billion in 2023.
- Finance costs in the third quarter of 2024 declined from a net gain of N719 million to a cost of N4.5 billion. This resulted in its pre-tax loss of N3.05 billion from a pre-tax profit of N4.29 billion in the same period of 2023.
Commentary- Despite a significant increase in revenues, the problems that affected the company in 2023 have not abated. Cadbury Nigeria Plc reported a pre-tax loss of N28.2 billion for the 2023 fiscal year, reflecting a steep 2269% decline from the N1.3 billion pre-tax profit recorded in 2022.
- The company’s Board of Directors announced that on January 28, 2024, they negotiated a $20 million debt forgiveness from CSOL on the $40 million received on January 15, 2024. They explained that the debt forgiveness was necessary due to the sharp devaluation of the Nigerian Naira, which fell from N911.68 in December 2023 to over N1,400 in January 2024 against the US Dollar.
- In the period under review, the company recorded N53.35 billion in revenues from its refreshment beverage segment and N25.71 billion from confectionary sales.
- Revenues from the company’s intermediate cocoa products rose by more than 200% from N3.2 billion to N10.45 billion in the third quarter of the year.
