Cadbury Nigeria commences year on high, reports over 500% growth in first quarter profit

NIGERIA – Cadbury Nigeria Plc, a subsidiary of Mondelēz International, has reported profit of N1.54 billion (US$3.7m) for the first quarter of the year ended March 31, 2022, representing a growth of 538%, when compared to N242 million (US$590,000) realised in the same period in 2021.

The company announced this in its unaudited financial result highlighting that its Profit before tax grew by 538 per cent to N2.2 billion (US$5.3m) in Q1 2022 from N345.1 million (US$840,000) reported in Q1 2021.

The packaged food maker also realised a stellar performance of its top line earning registering 43% jump in turnover to N12.78 billion (US$30.9m).

In the statement, Managing Director, Cadbury Nigeria, Mrs. Oyeyimika Adeboye, attributed the gains to the company’s current repositioning strategy that was beginning to yield the desired results.

She said, “The business environment in which we operate continues to be challenging. With high inflation and spiraling Naira devaluation resulting in a significantly higher cost of doing business in Nigeria, we have had to increase the price of our products to bridge the huge cost from high commodity and FX impact on most of our input costs.

“We recognize the importance of nourishing and delighting our consumers with the right snacks and we will continue to make our iconic brands available to our consumers while also delivering acceptable returns to our shareholders.”

Prior to releasing the interim results, Cadbury Nigeria gave a break-down of its performance in the full year ended December 2021.

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During that period, the maker of hot chocolate drink reported a 52% decline in profit from N931.8m (US$2.24m) to N449.71m (US$1.08m).

The Nigeria Stock Exchange listed company registered the decline in bottom-line performance despite 20% growth in revenue to N42.3 billion (US$101.75m) compared to N35.41 billion (US$85.1m) attained in the same period of 2020.

This is attribute to the rise in costs as during the period under review, the company witnessed a persistent increase in prices of goods and services, thereby resulting in inflationary pressures that affected both consumers and producers.

In the same vein, producers faced a significant increase in the cost of production as raw materials and freight costs increased.

Hence, although the company increased sales on the back of double-digit food inflation, profit was greatly subdued by production costs which increased by a whopping 21% y-o-y.

Also, high taxes ate into the company’s earnings as pre-tax profit grew from N408.065 million (US$980,000) in 2020 to N1.097billion (US$2.64m) in 2021, representing an increase of 169.05 per cent.

It is important to note, the company’s revenue was driven by significant domestic sales, which was 25% higher, generating a total of N40.27 billion (US$96.8m). Meanwhile revenue from export sales raked in N2.10 billion (US$5.05m), representing 32% decline.

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