Cadbury Nigeria Falls Into Negative Equity Crisis, Declares N27bn Loss In 2023

Cadbury Nigeria Plc has posted N27.63bn loss after operating for the full year of 2023 but the company may be in a red flag after total equity widened.

Cadbury Nigeria’s negative equity was N15bn in the twelve months of 2023 after it declined by 214 per cent from the N13.3bn equity which it was in 2022.

When a company’s total equity is negative, the amount of its liabilities exceeds the amount of its assets, according to a 2016 PricewaterhouseCoopers publication.

This could result in a company being bankrupt if it persists, PWC added.

Cadbury’s financials for the year-end 2023 analysed by THE WHISTLER showed that the negative equity was driven by a retained loss of N19.9bn.

The company’s basic loss per share which was assigned to every single share held was N1.47m compared to the earnings per share of N31,000 attributed to shareholders in December 2022.

The manufacturer’s books showed that its cash and cash equivalent which consists of cash and call deposits with associated exchange difference for foreign currency-denominated balances and net of outstanding bank overdrafts also fell by 25.4 per cent to N20.45bn as of December 31, 2023.

The company had cash and cash equivalent of N27.45bn in the full year of 2022.

The books revealed that Cadbury Nigeria increased its borrowing from N16.2bn in 2022 to N36.16bn by the end of December 2023.

However, the company recorded 46 per cent growth in revenue from N55.2bn in 2022 to N80.37bn in December 2022.

A breakdown of its revenues showed that refreshment beverages made up N53.87bn of its revenue which came from Nigeria alone.

The company sold confectionary worth N20.68bn from Nigeria alone and another N300.5m from other countries.

During the period under review, Cadbury sold N4.54bn worth of intermediate cocoa products from other countries, while the Nigerian operation was a negative N257m.