The urgent need for a new strategy to refocus the operations of food beverages and confectioneries giant- Cadbury Nigeria Plc became even more evident, judging by the numbers released for the first quarter ended March 31, 2017, on Tuesday showing that while cost only rose marginally, operating cost leaped, resulting in a significant 88.8% profit plunge that threatens the company’s health and wellbeing.
Revenue for the three-month period rose to N8.071bn, an increase of N950m or 13.34% from the previous first quarter’s N7.121bn; while cost of sales rose by a faster N1.569bn or 33.09% from N4.741bn to N6.31bn; resulting in gross profit of N1.76bn, compared with N2.38bn in the corresponding first quarter of 2016.
Other income for the period stood at N6.525m, from N4.455m; selling and distribution
Expenses was flat at N1.203bn, from the previous N1.274bn; administrative expenses stood at N443.249m from N470.944m, leading a profit from operating activities of N120.67m, as against the previous N639.495m. Finance income was down to N37.332m from N54.136m, just as finance cost stood at N62.174m, there was no such item last year, leading to net finance cost of N24.843m from an income of N54.136m.
Profit before tax fell to N95.827m, from N693.631m in the first quarter of 2016; income tax expense dropped to N2.875m from N20.809m.
Profit after tax stood at N92.952m, down by N597.804m or 88.85% from N672.822m, translating to earnings per share of 5 kobo, as against the previous 36 kobo.
In the note to the account, the company noted that the performance score-card has not taken into cognizance that provision has not “been made for royalty, technical service and management fees (in the financial statement and that) if the company were to apply the most recently approved NOTAP (National Office of Technology Acquisition and Promotion) rates against these draft agreements, there will be a contingent liability of N156m.”
This would definitely have drawn the numbers even deep red figures.