NIGERIA – Beverage makers, Cadbury Nigeria Plc on Thursday reported a loss of N250.716 million for the half year ended June 30, 2015, compared with a profit of N1.792 billion in the corresponding period of 2014.
The results showed a revenue of N14.137 billion, showing a decline of eight per cent from N15.321 billion in 2014.
Cost of sale was flat at N10 billion, while sales, marketing distribution/administration and other expenses rose by 10 per cent from N4 billion to N4.452 billion.
Financial income dipped by 90 per cent from N131.315 million to N13.192 million in 2014. Hence, Cadbury ended the half year with a loss of N250.715 million a profit of N1.263 billion in 2014.
The company had last year recorded dip of 75 per cent in net profit the full year of 2014. Based on the decline last year, Cadbury cut its dividend pay-out from N1.30 to 65 kobo per share. With the loss in the first half of 2015, market analysts said the hope of shareholders to get dividend at the end of the year are very slim.
Addressing shareholders last year, Chairman of Cadbury, Mr. Atedo Peterside, said the company planned to achieve energy efficiency and cut costs.
Reviewing some of the achievements of the company in 2014, he said, “As part of our expansion strategy, our state-of-the-art food drinks factory was commissioned during the second half of the year. We carried out various consumer-engagement programmes to maximise opportunities in the market place.”
However, those positive developments did not yield good results as the company faced various challenges in the first half of the year.
Assessing the second quarter results, analysts at FBN Capital said the top-line decline is unsurprising given the persistent headwinds faced over recent quarters.
“The insecurity in the north of the country, lower disposable incomes and the devaluations of the naira have proved difficult to overcome.
This situation is even more difficult for Cadbury, given its limited product portfolio.
To a large extent, the devaluations of the naira have weighed on Cadbury’s performance during the quarter. Besides cocoa, which Cadbury actively sources locally, other primary raw materials such as sugar and milk are mainly imported.”