Olufemi Adeyemi

Cadbury Nigeria Plc has emerged from two years of losses, posting a strong return to profitability in 2025. The turnaround reflects a combination of improved sales, better cost control, and a significant easing of foreign-exchange headwinds that previously eroded earnings.

For the year ended December 2025, the chocolate and beverage maker reported a profit after tax of N12.09 billion, reversing losses of N22.22 billion in 2024 and N19.08 billion in 2023, according to its unaudited financial statements. The results mark a notable recovery for the Nigerian unit of Mondelez International after currency devaluations, rising finance costs, and weak consumer demand pushed the company into deep losses over the past two years.

Sales Growth Drives Revenue Recovery

Revenue rose sharply by 31% to N169.84 billion from N129.17 billion in 2024. The improvement was driven by price increases, better product availability, and a gradual recovery in consumer demand despite persistent inflation.

The company’s gross profit more than doubled to N36.60 billion, lifting gross margin to about 21.5% from roughly 14.1% a year earlier. This highlights the impact of pricing actions and tighter cost management.

Operating Efficiency Improves

Operating performance improved significantly, with results from operating activities increasing to N20.55 billion, compared with N5.96 billion in 2024. Expenses rose at a slower pace than revenue, contributing to the stronger operating outcome.

While selling and distribution expenses increased to N12.22 billion from N6.27 billion—reflecting higher volumes and logistics costs—administrative expenses fell to N3.34 billion from N6.02 billion, signalling improved overhead efficiency following earlier restructuring.

FX Gains and Lower Finance Costs Fuel Profit

The biggest boost to earnings came from a sharp reduction in finance costs. Net finance cost narrowed dramatically to N3.28 billion from N34.29 billion in 2024, when heavy foreign-exchange losses on dollar-denominated obligations wiped out operating gains.

In 2025, exchange rate movements became supportive, with the company recording unrealised FX gains and far lower realised losses, benefiting from a more stable naira and reduced foreign-currency exposure.

As a result, profit before tax swung to N17.27 billion, compared with a loss of N28.33 billion in 2024. After tax expenses of N5.18 billion, Cadbury delivered its strongest earnings in several years. Basic earnings per share rose to 530 kobo, compared with a loss of 975 kobo in 2024.

Balance Sheet Strengthening, But Leverage Remains

The stronger earnings also improved the company’s balance sheet. Total equity nearly quadrupled to N16.47 billion, up from N4.38 billion in 2024, supported by retained earnings and prior-year intercompany loan forgiveness. Retained losses narrowed to N25.21 billion from N37.30 billion, underscoring the pace of recovery.

Borrowings declined to N22.81 billion from N32.81 billion, helping to reduce interest expenses, although trade and other payables rose to N36.98 billion as raw material purchases increased alongside operational scale-up. Cash and cash equivalents dipped slightly to N15.02 billion from N16.34 billion, following capital expenditure and debt repayments.

Operating cash flow remained solid at N20.48 billion, broadly flat year-on-year, supported by stronger earnings and favourable working-capital movements. This cash generation helped fund N5.30 billion in capital expenditure and repayments of intercompany loans and lease liabilities, indicating gradual balance-sheet repair.

Product Mix and Market Outlook

By product category, refreshment beverages—led by Bournvita—remained the main revenue driver, contributing N104.59 billion, while confectionery generated N53.53 billion. Export sales fell to N11.71 billion, suggesting growth remains concentrated in the domestic market where consumers continue to face pressure despite signs of easing inflation.

The turnaround comes as Nigeria’s consumer goods makers adjust to a new macroeconomic reality of a weaker but more predictable currency and slowing inflation. The naira recorded its first gain in more than a decade last year, supported by central bank reforms that improved access to foreign exchange. General prices also slowed to their lowest levels since the CPI reweighting, with inflation cooling to 15.15% in December from over 30% in the same period in 2024, helping to boost consumer spending.

Market Reaction

Cadbury shares closed on Monday, January 26, 2026, at N65.30 on the Nigerian Exchange (NGX). The stock has gained 9.02% year-to-date, ranking 73rd in NGX performance, and has appreciated 10% over the past four weeks, reflecting growing investor confidence in the company’s recovery.