Cadbury Nigeria’s half-year profit fell 20% to N8.11 billion, even as revenue climbed 8% to N83.35 billion in the six months to June 30, the company disclosed in its unaudited half-year filing.
Gross profit rose 10% to N24.12 billion, and gross margin edged up to 28.9% from 28.3% a year earlier. But selling and distribution expenses more than doubled to N10.77 billion, pulling operating profit down 28% to N11.77 billion and erasing the gains higher up the income statement.
The strain traces back to the first quarter, when pre-tax profit fell 39% as production and distribution costs outpaced a 7% rise in sales. Rising freight costs and softer consumer demand have persisted into the second quarter, managing director Ayman Fahmy Gaafar said, adding that the company is expanding its go-to-market capabilities to respond.
Cadbury built up inventory heavily during the half, with stock levels nearly doubling to N29.39 billion from N17.35 billion, a move that ties up cash even as it guards against further cost inflation. Net cash generated from operations dropped to N567.85 million from N11.53 billion, and cash reserves closed the period lower at N9.98 billion.
One bright spot: net finance costs fell 89% to N187 million from N1.74 billion, largely on favourable foreign exchange movements, saving the company about N1.55 billion. That cushion was not enough to offset the squeeze on operating margins.
Cadbury’s other Nigerian FMCG peers face a similar bind. Brewers reporting first-half numbers this month have shown revenue growth outpacing profit, while proposed sugar taxation adds another cost line manufacturers are watching. Gaafar’s next test will be whether the detailed operating expense breakdown, due when Cadbury files its audited accounts with the Nigerian Exchange, shows the cost pressure easing or hardening into the second half.
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