Cadbury Nigeria Plc turned in a loss of N17.4 billion in the final quarter which jerked up the company’s net loss from N10 billion at the end of the third quarter to N27.6 billion at the full year.
The final quarter was one of the worst earning seasons of the beverages and confectionery company in the year, as foreign exchange losses swelled from under N21 billion at the end of the third quarter to almost N37 billion at the full year.
The company’s full-year unaudited financial report at the end of December 2023 shows a backslide in fundamentals from the improvements seen in the third quarter.
Costs grew generally in the quarter and consumed more than all the sales revenue for the period, creating an operating loss of about N1.3 billion for the quarter.
This is quite unlike in the preceding quarter when sales revenue accelerated and costs moderated to create a profit of over N4 billion for the quarter.
The company’s two bad quarters in the year were the second and the fourth when huge foreign exchange losses of N20.7 billion and N16 billion created net losses of N18 billion and N17.4 billion respectively.
The losses gulped profits of N3.4 billion in the first quarter and N4.3 billion in the third quarter and left a loss of N27.6 billion for shareholders for the year.
The huge loss has created a retained deficit of almost N20 billion and dug a hole of N15 billion of negative equity in the balance sheet.
Apart from the foreign exchange loss in the final quarter, some strength in the company’s fundamentals seen in the previous interim periods disappeared in the final quarter.
Cost of sales claimed 93 percent of sales revenue in the final quarter and the gross profit of N1.5 billion for the quarter was only a little above one-half of total operating expenses, creating an operating loss of about N1.3 billion for the quarter.
This is a major deterioration of the third quarter numbers that showed a gross profit of N6 billion and an operating profit of N3.6 billion for the quarter. Again, compared to a net finance income of about N720 million in the third quarter, the final quarter produced a net finance cost of over N16 billion.
The company’s operations for the full year show a turnover of N80.4 billion at the end of December 2023, which is an increase of 45.6 percent from the closing turnover figure of a little over N55 billion in 2022.
Sales revenue was boosted more by high inflation than consumer demand and the usually positive impact of seasonal sales in the final quarter was missing in the year with sales down from N23.6 billion in the third quarter to N21 billion in the fourth quarter.
The company achieved a slower growth in production cost than sales at 31.8 percent to N62.6 billion against the 45.6 per cent growth in sales revenue.
The stronger growth in sales than production cost lifted gross profit impressively by 130.4 percent to N17.8 billion at the end of the year.
Selling/distribution expenses also moderated at an increase of 15.6 percent to N7.3 billion but administrative costs surged ahead at 67.7 percent to over N2 billion.
Despite the encroachment of administrative expenses on revenue and the operating loss in the final quarter, the company achieved outstanding growth in operating profit from a marginal N194 million at the end of 2022 to N8.4 billion at the end of 2023.
The bad news that changed the company’s earnings story for the year came from a net finance cost of N36 billion that was fueled by foreign exchange losses. The figure is a deep plunge from net finance income of over N1 billion with which the company ended the 2022 financial year.
The huge foreign exchange loss gulped the operating profit and left a pre-tax loss of N27.6 billion which is the same as the net loss for the year.
Cadbury Nigeria lost N14.71 per share at the end of the 2023 operations, dropping from 31 kobo earnings per share in 2022.
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