Cadbury Nigeria Plc has reportedly lost a whopping N20.9 billion to a galloping exchange rate crisis in the Nigerian forex market.
The development is coming even as Cadbury Nigeria Plc says it was repositioning to fully compete with other brands when the challenges in sourcing foreign exchange occurred amid the negative effects of inflation on consumers’ purchasing power.
This was contained in a press statement seen by ENigeriaNews where the Managing Director of Cadbury Nigeria Plc Mrs. Oyeyimika Adeboye said the company was bedeviled by the herculean task of sourcing for US dollars to import key raw and packaging materials as well as machinery and spare parts for its Nigerian operation.
A critical analysis by ENigeria Newspaper shows that when compared to the second quarter in 2022, Cadbury Nigeria Plc lost a whopping tax of about N17.9 billion in the second quarter of 2023
Explaining the reason for the loss, a report by Nairametrics it was as a result of N20.9 billion write-down the company took due to the impact of the unification of the naira on its loans.
The company carries forex-related loans with dollar-denominated interest rate components that triggered the losses. The depreciation of the Naira from about N460/$1 to about N790/$1 triggered the forex losses.
However, Cadbury was able to grow its top-line revenues by about 26% to N19 billion while gross profit also rose 176% to N7.2 billion.
Despite the losses arising from the extraordinary forex losses, Cadbury did post an operating profit of N1.5 billion representing a 64% increase year on year.
“Our cost of doing business has increased significantly as our suppliers also faced similar issues in accessing foreign exchange,” Mrs. Oyeyimika Adeboye said.
“With rising inflation and higher cost of doing business, we have had to take price adjustments on a number of our products during 2021. This is more than we have ever had to do in many years, and a reflection of the difficult times we currently face.”
However, despite the supply challenges, Mrs. Adeboye said the Company witnessed a strong performance across all categories and brands.
She added: “We place a high value on our iconic brands, recognizing that our consumers trust us to offer them quality and healthy snacking options.
“We also understand that our customers, who are our business partners, expect us to support them as we operate in the markets to deliver our products to our consumers. Our much-loved brands are the hard currency we trade with, and we continue to invest in them to sustain our growth.”
This is a developing story; more is to come shortly. Follow ENigeriaNews on all social media platforms for updates.
