Cadbury Nigeria Plc has reported a pre-tax profit of N5.20 billion in its Q1 2026 results, representing a 39.2% decline from N8.54 billion recorded in the corresponding period of 2025, as rising production and operating costs weighed heavily on profitability.
This is according to the company’s unaudited financial results for the three-month period ended March 31, 2026 which was filed on the exchange on Wednesday, 29, 2026.
The company recorded revenue growth of 7% to N39.83 billion from N37.23 billion in Q1 2025, driven largely by earnings from the Refreshment Beverages segment in Nigeria alone, which accounted for N24.033 billion.
Earnings from Confectionery majorly in Nigeria, accounted for N15.15 billion.
However, a sharp increase in cost of sales to N28.94 billion up from N25.07 billion and an increase in operating expenses eroded gains from the top-line expansion, leaving the gross profit down at N10.89 billion compared to N12.15 billion in Q1, 2025.
Key highlights (Q1 2026 vs Q1 2025)Â
- Revenue: N39.83 billion, up 7.0% YoY
- Cost of sales: N28.94 billion, up 15.5% YoY
- Gross profit: N10.89 billion, down 10.4% YoY
- Selling & distribution expenses: N5.16 billion, up 128.5% YoY
- Administrative expenses: N724.78 million, up 21.2% YoY
- Pre-tax profit: N5.20 billion, down 39.2% YoY
- Post-tax profit: N3.64 billion, down 39.2% YoY
- Finance cost: N477.92 million (net), down 58.2% YoY
- Total assets: N76.74 billion, up 1.8% YoY
- Total liabilities: N59.68 billion, down 3.6% YoY
- Total equity: N17.06 billion, up 27.0% YoY
- EPS: 160 kobo, down 39.0% YoY
Driving the numbers
An analysis of the company’s financial performance reveals that profitability was significantly impacted by rising costs of raw materials and operating costs.
Cost of sales increased by 15.5%, outpacing revenue growth and compressing margins. As a result, gross profit declined by 10.4% to N10.89 billion, with gross margin falling to about 27.3% from 32.6% in the prior year.
The most notable pressure point came from operating expenses, particularly selling and distribution costs, which surged by 128.5% to N5.16 billion.
This reflects increased spending on marketing, logistics, and route-to-market expansion, but at a pace that outweighed revenue gains.
Administrative expenses also rose by 21.2%, further adding to cost pressures.
Despite these challenges, finance costs declined sharply by 58.2% to N477.92 million, supported by reduced borrowings and improved debt management.
However, the savings from lower finance costs were insufficient to offset the impact of higher operating and production expenses.
As a result, both pre-tax and post-tax profits fell by 39.2%, highlighting weak profit conversion despite revenue growth.
Balance sheet position
Total assets rose marginally by 1.8% to N76.74 billion, indicating limited expansion during the period and reliance on existing asset capacity.
Total liabilities declined by 3.6% to N59.68 billion, driven largely by a 19.5% reduction in borrowings, which points to improved deleveraging efforts.
Total equity increased by 27% to N17.06 billion, supported by improved retained earnings and a reduction in accumulated losses, strengthening the company’s capital base.
As profitability weakened, cash flow declined, resulting in 41.63% decline in cash and cash equivalents to N8.76 billion, down from N15.01 billion in the corresponding period of 2025.
Market reaction
The market responded to the less-than-expected result by pricing the stock at a significant discount on Wednesday, April 29, 2026.
Intraday trading price movement showed the stock price falling by N7.35 to N66.15 per share, representing maximum 10% daily decline from N73.50 per share as of Tuesday, April 28, 2026.
The stock began the year at a price of N59.90 and has since gained 22.7% on that price valuation, ranking it 65th on the NGX in terms of year-to-date performance.
It is currently the 49th most valuable stock on the NGX with a market capitalization of N168 billion, which makes about 0.114% of the equity market value.
What you should know
Cadbury Nigeria bounced back in 2025, posting a pretax profit of N17.2 billion for the 2025 financial year, a significant recovery from the N28.3 billion loss recorded in 2024.
The company reported full-year revenue of N169.8 billion in 2025, representing a 31.49% increase from N129.1 billion in the previous year.
After recognizing an income tax credit of N5.1 billion, profit after tax stood at N12.08 billion.
Investors will be looking to see an improvement in the bottom-line by the end of half year 2026 and a signal for returns on investment if the share price rally could be sustained.
