Investors’ Sentiments Boost Cadbury Nigeria’s Value by 22%
Cadbury Nigeria’s Plc market value increased significantly on the Nigerian Exchange as investors staked huge bets on the consumer goods index. The stock rallied as investors’ sentiments improved.
This was driven in part by Cadbury Nigeria’s parent company’s recent increase in shareholding to about 80%. The share price of Cadbury Nigeria Plc increased to N21.30 on the Nigerian Exchange trading platform, up by 22.4% from N17.40 at the beginning of the previous week.
The positive price movement increased the company’s market value to N48.57 billion. Cadbury Nigeria is trading at 33% to 52-week high as unimpressive earnings record triggered selling rally
MarketForces Africa Research revealed that Cadbury Nigeria Plc has a 20.59% free float, a reduction from 24.99% in Dec 2023 as the parent company increased its stake in the consumer goods company.
Cadbury Schweppes Overseas Limited has increased its shareholding in Cadbury Nigeria Plc to 79.39% from 74.97% after the debt deal. The consumer goods sector has continued to face multiple pressures emanating from Nigeria’s uncomfortable macroeconomic indicators.
In the equities market, investors have been reacting negatively, leading to Cadbury Nigeria’s weak earnings performance. In its 9-month financial statement, Cadbury Nigeria recorded a 51.23% year-on-year increase in revenue from N59.20 billion to N89.53 billion.
The consumer goods company’s revenue growth was primarily driven by domestic and export sales, supported by increased prices of products. However, analysts pointed out that domestic sales made up a larger portion of the margin, and they anticipate that the company will maintain its momentum in Q4 with year-end sales.
A review of Cadbury’s numbers revealed that cost of sales increased by 74.30% year-on-year, rising from N42.89 billion in 9M 2023 to N74.76 billion in 9M 2024.
This surge is attributable to inflationary pressures that significantly drove up production costs, reflecting the rising prices of raw materials and other input factors.
Furthermore, Cadbury recorded a gross loss of 9.45% year-on-year from N16.31 billion to N14.76 billion. Notably, other losses surge by 1575.45% year-on-year, primarily driven majorly by impairments on idle assets and losses from disposal of property, plant, and equipment.
Details from the financial revealed that Cadbury Nigeria’s net finance costs went up by 16.55% year-on-year from N19.89 billion in 2023 to N23.18 billion in 2024.
Analysts said the surge was driven by a huge increase in its realized exchange differences (from N191.72 million to N15.00 billion). It was also influenced by a rise in interest expenses on borrowings, bank charges, and fees.
Also, the company posted 80% year-on-year decline in interest income on bank deposits. Notably, the company experienced a decline in realized exchange differences at the end of the 9-month financial year 2024.
The company’s loss before tax increased by 65.36% year-on-year from N10.24 billion to N16.94 billion, leading to the firm being granted a tax credit of N5.08 billion.
Consequently, loss after tax rose slightly by 15.82% year-on-year, from N10.24 billion in 9M 2023 to N11.86 billion in 9M 2024. # Investors Unpriced Sentiments Boost Cadbury Nigeria’s Value by 22% Naira Plunges on Suboptimal FX Intervention
