Cadbury Nigeria’s performance in the first quarter of 2024 presented a mixed bag of results, characterized by robust revenue growth yet overshadowed by escalating costs and foreign exchange (FX) losses.
In 1Q24, the company recorded a substantial year-on-year (YoY) revenue increase, soaring to N23.7 billion from N16.6 billion in 1Q23, marking a notable 43.1% surge.
This growth was chiefly propelled by the refreshment beverages segment (+21.4% YoY to N14.1 billion), confectionary (+99.2% YoY to N7.8 billion), and intermediate cocoa products (+344.6% YoY to N1.7 billion).
Domestic revenues continued their upward trajectory, climbing by 36.5% YoY to N21.9 billion, while exports witnessed robust growth, skyrocketing by 258.4% YoY to N1.8 billion in 1Q24.
However, the surge in the cost of sales outpaced revenue growth, escalating by 83.3% YoY to N18.7 billion, resulting in a decline in gross profit to N5.0 billion, a 21.5% YoY decrease.
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Operating performance further suffered, with the company reporting an operating profit drop of 39.4% YoY to N2.8 billion in 1Q24. Additionally, Cadbury Nigeria incurred a net finance loss of N13.2 billion, primarily attributable to FX losses, compared to a net finance income of N380 million in 1Q23.
Despite benefiting from income tax credits of N3.1 billion in 1Q24 (versus tax expenses of N1.5 billion in 1Q23), the company recorded a net loss of N7.3 billion, contrasting with a net profit of N3.5 billion in 1Q23. Consequently, earnings per share plummeted to a loss of N3.21 in 1Q24 compared to earnings per share of N1.84 in 1Q23.
Assessing the sequential performance, Cadbury Nigeria achieved a 11.9% quarter-on-quarter (QoQ) revenue growth in 1Q24, reaching N23.7 billion from N21.2 billion in 4Q23.
Although administrative expenses increased by 23.1% QoQ to N737 million, selling and distribution expenses declined by 30.7% QoQ to N1.5 billion. As a result, the company’s net loss for 1Q24 narrowed to N7.3 billion, compared to N17.4 billion in 4Q23.
Despite the company’s mixed performance, the market reaction to Cadbury Nigeria’s 1Q24 results was relatively muted, with the stock remaining unchanged at N17.00 amidst a 0.55% gain for the All-Share Index on 2/5.
Subsequently, the stock closed flat at N17.00 versus a 0.83% gain for the All-Share Index on 3/5.
(Edited by Oludare Mayowa; omayowa@globalfinancialdigest.com; Newsroom: +234 8033 964 138)
