Cadbury Nigeria Plc incurs N20.9 billion in exchange rate loss

Cadbury Nigeria Plc reported a significant loss before tax of N17.9 billion in the second quarter of 2023, a stark contrast to the N800 million profit recorded during the same period in 2022. The main reason for this loss was a massive N20.9 billion write-down resulting from the impact of the unification of the naira on the company’s loans.

The company had forex-related loans with interest rates denominated in dollars, and the depreciation of the Naira from N460/$1 to about N790/$1 triggered substantial forex losses.

Despite the extraordinary forex losses, Cadbury managed to achieve a 26% increase in top-line revenues, reaching N19 billion, while the gross profit also surged by 176% to N7.2 billion.

Remarkably, Cadbury still posted an operating profit of N1.5 billion, representing a 64% yearly increase.

Key highlights from the Q2 Earnings:

– Revenue for the quarter amounted to N19.04 billion, compared to N15.09 billion in the corresponding quarter of 2022.
– Cost of Sales marginally declined by 5.21%, reaching N11.82 billion, down from N12.47 billion reported in the same period last year.
– Gross profit witnessed a significant increase of 175.57%, amounting to N7.22 billion, up from N2.62 billion reported last year.
– Pre-tax loss for the quarter declined to N17.9 billion, contrasting with the N800 million profit in Q2 2022 (due to the impact of fx unification on dollar-related loans).
– The cash flow equivalent for the half-year ended June 30, 2023, stood at N39.17 billion, indicating an 88% increase from N20.84 billion recorded in the same period last year.

About Cadbury Nigeria Plc:
Cadbury Nigeria Plc is a company based in Nigeria, with its registered office located on Lateef Jakande Road, Ikeja, Lagos.

The company is primarily engaged in manufacturing and selling branded fast-moving consumer goods, primarily in the Nigerian market but also for exports.

Their product portfolio falls into four main categories: refreshment beverages, confectionery, biscuits, and intermediate cocoa products.

Refreshment beverages include Cadbury Bournvita and 3-in-1 Hot Chocolate, while their confectionery products consist of TomTom, Candy Caramel, Candy Coffee, Buttermint, and Clorets gum. Bournvita Biscuit is their offering in the biscuit category, and Cocoa Butter is a key product in the intermediate cocoa category.