Cadbury Nigeria 9M Profit Rises 5% to ₦10.14bn as Third Quarter Rebounds to Profit

A Quarter Won on the Factory Floor

The nine-month headline understates what changed in the third quarter. Cadbury earned ₦2.03 billion in the three months to September, against a loss of ₦495.96 million a year earlier, and it did so on revenue growth of just 3.2% to ₦43.34 billion. The swing came from production costs. Cost of sales fell 14.3% to ₦30.96 billion even as sales rose, so quarterly gross profit more than doubled to ₦12.38 billion and the gross margin widened to 28.6% from 14%.

That margin repair is the real story of the period. Across the nine months, gross profit rose 31.5% to ₦36.50 billion on revenue up only 6.2%, which means the company is keeping substantially more of each naira of sales than it did a year ago. For a manufacturer whose earnings were squeezed for two years by input costs and currency losses, the production line, not the price list, is now doing the work.

Distribution Costs Are Eating the Recovery

The leak sits below the gross profit line. Selling and distribution expenses more than doubled over nine months, to ₦20.05 billion from ₦9.08 billion, and rose to ₦9.28 billion in the third quarter alone from ₦4.18 billion. That single line explains why nine-month operating profit fell 10% to ₦14.31 billion despite the stronger gross result, and why profit before tax grew only 4.8% to ₦14.48 billion.

Administrative expenses moved the other way, down to ₦1.58 billion from ₦2.41 billion over nine months, and the third quarter also brought net finance income of ₦362.91 million against a finance cost a year earlier. The pattern is specific rather than general: Cadbury has contained its overheads and its factory costs, but getting Bournvita and TomTom to market is costing far more than it did in 2025, and that cost is growing faster than sales.

A Stronger Balance Sheet, a Thinner Cash Buffer

The balance sheet shows the benefit of two profitable years. Total equity reached ₦23.56 billion, up 75.6% from ₦13.42 billion at the end of 2025, and the accumulated retained loss narrowed to ₦18.19 billion from ₦28.33 billion. Borrowings fell to ₦14.90 billion from ₦22.81 billion at the end of December 2025, reducing the finance cost risk that dominated the company's recent history.

Cash, however, moved in the opposite direction, falling to ₦10.67 billion from ₦15.02 billion, while inventories rose to ₦23.40 billion from ₦17.36 billion. More of the profit is sitting in stock than in the bank. If the distribution bill keeps rising at its current pace into the peak fourth quarter selling season, that working capital position, rather than demand, becomes the constraint on how much of the margin recovery reaches the bottom line.