NIGERIA – Cadbury Nigeria Plc, a subsidiary of Mondelez International, has reported a 52% decline in full year profit for the period ended December 2021 from N931.8m (US$2.24m) to N449.71m (US$1.08m).
The chocolate maker, 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.
Managing Director, Cadbury Nigeria, Oyeyimika Adeboye, attributed the company’s strong performance in 2021 to the effectiveness of its strategy and capacity to generate sustainable revenue.
She said, “Despite the tough operating environment characterised by the high cost of doing business, rising inflation, high cost of funds, difficulty in accessing foreign exchange (forex) and policy inconsistency, we recorded an appreciable increase in our top line growth, which is our highest so far.”
The export business was impacted by volatility in forex rate and the perennial Lagos port congestion, noting that the company has been shipping its products to and from Ghana via sea freight, following the introduction of new transit charges on trucks by the Government of the Republic of Benin, in June 2021.
The company also made money from interest income on bank deposits, raking in N856 million (US$2.06m) during the financial year.
A further look at the financial results showed that the company’s long-term borrowings stood at N6.60 billion.
Cadbury’s total assets are now at N43.69 billion (US$105m), net assets grew marginally by 0.64% to N13.64 billion (US$32.8m).
In the global front, the American multinational confectionery and snack food company, Mondelez International, has emerged strong with better than predicted financial outcomes.
The Oreo cookie maker posted net sales of US$28.7 billion in the year ended Dec. 31, up 8% from $26.6 billion in 2020.