Shareholders of Cadbury Nigeria Plc have approved the conversion of an outstanding intercompany loan of $7.718 million or N7.04 billion owed to its majority shareholder, Cadbury Schweppes Overseas Limited to equity at an Extraordinary General Meeting (EGM) on Thursday in Lagos.
Cadbury Schweppes Overseas Limited, an entity currently owned by Mondelēz International Inc, holds a 74.97 per cent stake in Cadbury Nigeria, while the remaining shares are held by a diverse group of indigenous, individual, and institutional investors.
Cadbury Nigeria had earlier communicated the proposal to the Nigerian Exchange Limited (NGX) and the investing public.
The shareholders’ approval at the EGM now means that the loan would be converted into equity by the allotment of 402,082,657 ordinary shares of 50 kobo each to Cadbury Schweppes Overseas Limited. Shareholders also approved the Company’s proposal for an increase of its share capital from N939,100,981 to N1,140,142,309.50.
In a statement, Cadbury Nigeria’s Managing Director, Oyeyimika Adeboye, attributed this decision to the challenges faced in sourcing US Dollars to repay the Company’s foreign currency-denominated loans, due to persistent foreign currency scarcity experienced in the country.
The company had announced N27.6 billion loss before tax in its unaudited result and accounts for the full year ended December 31, 2023. This is against the N1.3billion billion reported in the 2022 financial year.
Contributing factors to the company’s worst performance include: N62.9billion cost of sales in 2023 from N47.49 billion in 2022 and N36.03 billion net finance cost in 2023 from N1.1 billion net finance income reported in 2022.
The Fast-Moving Consumer Goods (FMCG) company announced an operating profit of N8.4 billion for the full year ended December 31, 2023, representing an increase of 4228 per cent over the N194 million it recorded in the same period in 2022.
The Company’s gross profit also rose by 130 per cent from N7.7 billion in 2022 to N17.79 billion in 2023, while revenue increased by 46 per cent from N55.2 billion to N80.38 billion within the period under review.
The top line revealed that Cadbury Nigeria reported N80.4 billion in revenue, an increase of 46 per cent from N55.2 billion reported in 2022.
Adeboye in a statement said the Company sustained its current growth trajectory, despite the difficult operating environment in the country, due to its resilience as well as focus on revenue and cost management.
Noting that the massive devaluation of the Naira impacted negatively on businesses particularly operators in the fast-moving consumer goods (FMCGs) sector that rely on imported inputs, in the period under review, she said the increase in the Company’s operating profit was an indication that the growth strategies that it has put in place are yielding fruit
“We operate in a challenging environment that requires a degree of creativity and tenacity to remain in business.
“Despite the strong economic headwinds we faced during the year under review, Cadbury Nigeria remains committed to delivering value for its various stakeholders and we shall continue to put our consumers at the heart of what we do,” Adeboye added.