The chocolate maker’s latest unaudited financial statement shows that it reported an after-tax loss of N27.6 billion last year as against a profit of N583.1 million in 2022.
Its interest expense on borrowings surged by 170 percent to N1.36 billion.
“The exponential rise in its finance expense resulted in a loss before and after tax of N27.6 billion for 2023 (zero tax) compared with a profit before tax of N1.30 billion in 2022 and a net profit of N583 million in 2022,” analysts at CSL Research said in a note on Monday.
Further findings from the company’s statement show that basic (loss)/earnings per share (kobo) dipped to a loss of N1,471.2 in 2023 compared to a profit of N31.1 in 2022.
Cadbury Nigeria also reported negative equity of N15.1 billion, marking a 213 percent decline from N13.3 billion.
According to Investopedia, negative equity signifies a situation where a company’s total obligations exceed the total value of its assets, prompting investors to scrutinise the financials for potential risks.
Retained earnings recorded a loss of N19.9 billion, a downturn from a profit of N8.48 billion.
Despite the setbacks, revenue witnessed a 46 percent increase, reaching N80.3 billion compared to N55.2 billion.
The majority of the company’s revenue was derived from refreshment beverages (Bournvita and 3-in-1 Hot Chocolate), generating N53.87 billion, followed by confectionary products (Tom Tom, Buttermint, Candy Caramel, Candy Coffee, and Clorets gum) recording N20.69 billion.
Bournvita Biscuits contributed N1.23 billion, while Intermediate Cocoa Products recorded N4.29 billion. Gross profit more than doubled, surging from N7.7 billion to N17.7 billion.
Operating profit saw an increase to N8.3 billion from N194 million. However, other income recorded a decline of 11 percent to N72.59 million from N81.53 million primarily due to the absence of income from the gain on disposal of property, plant, and equipment.
Net cash used in/generated from operating activities amounted to N5.09 billion, a turnaround from the N1.99 billion loss.
Net cash used in investing activities incurred an increased loss of N1.45 billion from a loss of N694.9 million.
Net cash generated from financing activities recorded a loss in the period under review, totalling N9.52 billion, in contrast to the N12.15 billion profit.
Cash and cash equivalents at the end of the period saw a decline to N20.25 billion from N27.45 billion.
Earlier in the year, the company secured forex lines from its parent company as a temporary solution to forex liquidity shortages.
It converted its outstanding $7.7 million loan payable to its major shareholder, Cadbury Schweppes Overseas Limited to equity. The move which is yet to get approval from its shareholders, seeks to increase Cadbury Schweppes Overseas’ equity in Cadbury Nigeria to 79.4 percent from 74.97 percent.