Cadbury, a listedfood maker on the Nigeria Stock Exchange (NSE) has grown its profit by more than 200 percent to turns the corner and posts its biggest half-year profit since 2014 where it made over N1 billion.
The food maker on Friday announced that it made N670 million in profit for six month to June 30, 2019, 258 percent more than was posted a year ago when the company struggled with losses. This is the company’s first half-year profit since 2016.
Cadbury on the back of steady growth in revenue and improvements in net finance income was able to snap out of its spell of half-year losses which began in 2017 when huge finance cost amid economy-wide slowdown impacted on its performance.
Revenue grew by 11 percent in the first half of 2019 as Cadbury made sales up to N19.45 billion from 17.55 billion in 2018.
Despite a 4 percent rise in the cost of sales, the consumer good firm posted its first increase in gross profit since a steady decline in bottom-line since 2016. Cadbury’s gross earnings jumped 47 percent to N4.14 billion from N2.81 billion last year.
As a result of the positive trajectory, Cadbury was able to save N21.29 out of every hundred naira sales after accounting for the cost of goods sold. This was an improvement from N16.03 meaning the company sold its inventory for a higher profit.
Cadbury’s operating income surged 941 percent from a loss of N105.63 billion to N888.78 billion in profit as at June 2019, supported by 96 percent growth in income from other sources although both selling, general and administrative expenses rose in the period.
Net finance income for Cadbury turned bad for the consumer goods manufacturer following Nigeria’sfirst recession in 25 years which led to foreign exchange loss and tightened operating environment for manufacturers. Cadbury’s bank overdraft grew significantly in the first half of 2017 for instance.
The company was, however, able to bounce back in the first half of 2019 with a net finance income of N68.28 million as against a net cost of N318 million last year.
There was no finance cost incurred in the period and profit before tax increased by 326 percent to N957 million.
Earnings per share (basic), the portion of a company’s profit that is allocated to each outstanding share of common stock and an indicator of the company’s financial health improved to 36 kobo from a loss of 23 kobo. On Friday, shares of Cadbury remained flat at N10.8 per share.
Cadbury Nigeria Plc manufactures and markets sugar confectionery, food drinks, and food products. The Company also processes cocoa and exports cocoa products via its subsidiary Stanmark Cocoa Processing Company Ltd.
