Cadbury Nigeria Boosts Earnings in 2022

Cadbury Nigeria Boosts Earnings in 2022

Despite uncertainties in the economy, Cadbury Nigeria Plc boosted performance with a 30.3% year-on-year growth in revenue, printing at N55.21 billion in the financial year 2022 from N42.37 billion in the comparable period in 2021.

Overall, the consumer goods producer reported that its net profit increased by 28.7% to N583 million in 2022 from N450 million in the financial year 2021.

Supported by increased prices, the revenue growth was largely driven by the Beverages business segment, which contributed 69.5% to the topline and grew by 37% year on year to N38.39 billion in 2022 from N28.01 billion in 2021.

Confectionaries like TomTom, Butter mint, and others grew by 20.6% to N15.14 billion in 2022 from N12.56 billion in 2021, according to CSL Stockbrokers analysts. It is noted that the business segment contributed 27.4% to total revenue.

However, revenue from Intermediate Cocoa Products shrunk by 22.1% to N1.41 billion in 2022 from N1.81 billion in 2021 with a marginal contribution of 2.5% to the revenue mix.

“We believe that the recent increase in prices was a major driver of revenue growth”, CSL Stockbrokers analysts said in a review.

Cost of Sales (ex-depreciation), grew slightly higher than revenue, up 32.9% year on year to N46.72 billion in 2022 from N35.14 billion in 2021. This helped strengthened gross profit performance in the period.

Its audited financials showed that gross profit increased 17.5% year on year to N8.49 billion in 2022 from N7.23 billion in 2021, while gross margin declined by 177 basis points to 15.4% in 2022 from 17.1% in 2021.

The company’s operating expenses came in elevated as Administrative Expenses (adjusted for depreciation) grew by 42.6% to N1.04 billion in 2022 from N734 million in 2021.

Meanwhile, selling & distribution Expenses (adjusted for depreciation) increased by 26.3% to N6.16 billion in 2022 from N4.88 billion in 2021. Overall, Cadbury Nigeria’s earnings before interest tax depreciation and amortization (EBITDA) shrunk by 20.5% year on year to N1.28 billion in 2022 from N1.62bn in 2021.

Likewise, EBITDA Margin declined by 1.5ppts to 2.3% in 2022 from 3.8% in 2021. The deterioration in EBITDA Margin was driven by the rapid increase in the cost of sales, up 33% year on year.

In the period, the company reported that depreciation & amortization grew by 7.8% to N1.48 billion in 2022.  Thus, earnings before interest and Tax (EBIT) declined by 60.5% to N194 million in 2022 from N491 million in 2021.

This happened despite a 238.7% year-on-year increase in Other Income. Consequently, Cadbury Nigeria Plc reported a slowdown in operating performance in 2022.  Its financials showed that the company’s operating profit declined by 75.9%.

Given a surge in borrowings, Cadbury Nigeria Plc’s costs of borrowing increased, and the pressures were douse by finance income which shot up by 87.9% to N1.6 billion in 2022 from N856 million in 2021.

This was supported by healthy improvement in its Cash and Cash Equivalents, up by 54.0% to N27.45 billion in 2022 from N17.82 billion in 2021. Overall, net finance income increased by 82.1% y/y to N1.1bn in 2022 from N606m in 2021.

In 2022, Cadbury Nigeria’s total borrowings increased by 127.7% to N23.86 billion from N10.48 billion in 2021, hence its interest expense also grew significantly, up 101.9% to N504 million in 2022 from N250 million in 2021. #Cadbury Nigeria Boosts Earnings in 2022

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