Cadbury Nigeria Plc Suffers N20.9 Billion Exchange Rate Loss

In the second quarter of 2023, Cadbury Nigeria Plc experienced a considerable setback, reporting a loss before tax of N17.9 billion. This is in stark contrast to the N800 million profit recorded during the same period in 2022.

The primary cause of this substantial loss was the N20.9 billion write-down the company incurred due to the impact of the unification of the naira on its loans. Cadbury holds forex-related loans with dollar-denominated interest rate components, and the depreciation of the Naira, which fell from about N460/$1 to about N790/$1, triggered significant forex losses.

Despite this challenging situation, Cadbury did manage to achieve growth in other areas. Top-line revenues saw a commendable increase of about 26%, reaching N19 billion, while gross profit also rose impressively by 176% to N7.2 billion.

It is worth noting that, despite the losses resulting from the extraordinary forex losses, Cadbury still managed to post an operating profit of N1.5 billion, signifying a 64% yearly increase.

Overview of Key Highlights from Q2 Earnings

•The Revenue for the quarter amounted to N19.04 billion, a significant rise compared to N15.09 billion in the corresponding quarter of 2022.

•Cost of Sales marginally declined by 5.21% to N11.82 billion from N12.47 billion reported in the same period last year.

•Gross profit showed a remarkable increase of 175.57% to N7.22 billion from N2.62 billion reported last year.

•Pre-tax loss for the quarter declined to N17.9 billion from N800 million profit in Q2 2022 (attributed to the impact of forex unification on dollar-related loans).

•The cash flow equivalent for the six-month period ending on June 30, 2023, amounted to N39.17 billion, indicating a substantial 88% growth compared to the N20.84 billion reported during the corresponding period in the previous year.

About Cadbury Nigeria Plc

Cadbury Nigeria Plc, headquartered on Lateef Jakande Road, Ikeja, Lagos, is a Nigerian-based company primarily engaged in the production and sale of branded fast-moving consumer goods. While its main market focus is on serving the Nigerian market, the company also exports its products to other regions.

The company boasts a diverse range of brands, falling into four principal categories: refreshment beverages, confectionery, biscuits, and intermediate cocoa products. Some of its well-known products include Cadbury Bournvita and 3-in-1 Hot Chocolate in the refreshment beverages category, TomTom, Candy Caramel, Candy Coffee, Buttermint, and Clorets gum in the confectionery category, Bournvita Biscuit in the biscuit category, and Cocoa Butter as a key product in the intermediate cocoa category.

In the future, Cadbury Nigeria Plc will continue to play a significant role in the Nigerian market as a prominent manufacturer and distributor of well-known fast-moving consumer goods.