Cadbury Nigeria Plc experienced a tumultuous yet promising fiscal year 2024, marked by a significant reduction in losses, robust revenue growth, and strategic financial restructuring. Despite reporting a loss after tax of N10.4 billion, this represented a substantial 45% improvement compared to the N19.1 billion loss recorded in 2023. This positive trajectory was primarily driven by a 47% reduction in loss before tax, which decreased to N14.9 billion from N28.2 billion in the preceding year. While profitability remained a challenge, the company’s performance indicated a move towards financial stability and future growth potential.
A key highlight of Cadbury Nigeria’s 2024 performance was the remarkable 61% surge in revenue, reaching N129.2 billion compared to N80.4 billion in 2023. This impressive growth was fueled by the strong performance of the refreshment beverages segment, which contributed N77.5 billion to the total revenue. However, despite the significant revenue increase, gross profit saw only a marginal 1% growth to N17.5 billion from N17.3 billion, hampered by escalating input costs. This suggests that while the company successfully expanded its sales, it struggled to translate this top-line growth into substantial profit margins, likely due to inflationary pressures and operational inefficiencies.
The company’s financial statement revealed a notable improvement in its equity position, swinging from a negative N6.5 billion in 2023 to a positive N1.4 billion in 2024. This positive shift was largely attributed to a 21% increase in share capital and a substantial rise in share premium and other reserves, indicating a strengthened financial foundation. Furthermore, the basic loss per share improved by 55%, standing at 457 kobo compared to 1,016 kobo in 2023. Net assets per share also experienced a significant improvement, reaching 63 kobo from a negative 347 kobo in the prior year. These metrics showcase a positive trend in the company’s financial health, suggesting a move towards greater shareholder value.
Cadbury Nigeria implemented several strategic initiatives to navigate the challenging economic landscape and bolster its financial standing. A significant development was securing a $40 million intercompany loan from its parent company, Cadbury Schweppes Overseas Limited (CSOL), to address overdue foreign exchange loans with local banks. Furthermore, the company successfully negotiated a $20 million debt forgiveness on this loan with CSOL, providing much-needed relief from the burden of foreign debt servicing costs exacerbated by the Naira’s devaluation. This debt forgiveness was recorded as a contribution from the parent company under “other reserves” in the financial statements, further strengthening Cadbury Nigeria’s equity position.
Another important strategic move was the conversion of a $7.72 million intercompany loan from CSOL into equity. This conversion involved the allotment of 402,082,657 ordinary shares at N17.50 per share, resulting in a N7.04 billion boost to Cadbury Nigeria’s shareholder funds and net assets. This strategic decision further solidified the company’s balance sheet and provided a stronger platform for future investments and growth. These measures, coupled with the improved financial performance, demonstrate Cadbury Nigeria’s proactive approach to mitigating economic headwinds and positioning itself for long-term success.
The segment analysis for 2024 reveals that the refreshment beverages business continued to be the primary driver of revenue, generating N77.5 billion. The confectionery segment followed with N37.4 billion, while intermediate cocoa products contributed N14.3 billion. The biscuit segment, however, struggled, recording a marginal loss and contributing negligibly to the overall revenue. Despite the operational improvements and strategic financial restructuring, Cadbury Nigeria continued to face external challenges, including foreign exchange volatility and inflationary pressures, which impacted profitability. However, the company’s proactive measures to strengthen its financial position and capitalize on the strong performance of its core business segments demonstrate its resilience and commitment to achieving sustainable growth in the face of a challenging economic environment. The first-half results for 2024, showing a 33% improvement in the bottom line compared to the same period in 2023, further reinforces this positive outlook.
