CADBURY NIGERIA H1 2026: GROWTH IS COMING IN, BUT CASH IS WALKING OUT
For a company that has spent the last few years fighting to stay relevant on Nigerian shelves, Cadbury Nigeria’s first half of 2026 reads like two different stories. On the surface, the numbers look encouraging. Revenue is up, the brands are still moving, and the balance sheet is a little less battered than before. But look closer and the cracks show. Margins are thinner, costs are running hotter, and the cash that should be fueling the next phase of growth is draining out the door.
This is not the kind of growth that builds confidence. It is growth bought with higher prices, bigger trade spends, and more inventory sitting in warehouses. And in an economy where naira volatility and input inflation can erase a quarter’s profit overnight, that is a risky place to be.
Revenue expanded in the six months to June, supported by price increases and steady demand for Bournvita, Tom Tom and the rest of the portfolio. Quarterly sales also rose, which suggests consumers have not walked away despite the inflation. But Cadbury gave no breakdown between domestic and export sales, so we don’t know if this is broad-based strength or just Nigeria carrying the load. Without export disclosure, it is hard to tell whether the company is diversifying risk or doubling down on a market where purchasing power is still fragile.
The cost story is where the optimism fades. Cost of Sales climbed faster than revenue. Sugar, milk, packaging and energy all got more expensive, and Cadbury could not pass on all of it without killing volume. Gross margin therefore slipped. Operating costs were worse. Selling and distribution expenses nearly doubled year-on-year, and administrative costs jumped too. That points to more money spent on logistics, trade promotions and overheads just to keep products moving. The result is a business that is working harder for less. Quarterly trends confirm the pressure did not ease in Q2. This looks structural, not seasonal.
Finance costs offered some relief. Net finance cost fell compared to last year, helped by repayments on intercompany loans and import facilities. But that gain was wiped out by foreign exchange. After a big FX gain in FY2025, Cadbury booked a significant FX loss in H1 2026 on dollar cash balances and import obligations. For a company that still imports key inputs, that volatility turns earnings into a guessing game. One naira move can undo months of operational progress.
Profitability followed the same downward path. Despite higher sales, Profit Before Tax declined, and Profit After Tax fell even more sharply. The mix of weaker margins, higher opex and FX losses did the damage. Quarterly operating profit also dropped, so there was no late recovery in Q2. Earnings per share declined as a result, and returns to shareholders took a hit.
The balance sheet adds another layer of concern. Shareholders’ equity improved because retained profit trimmed the accumulated loss. That is positive. But cash tells the opposite story. The cash balance fell sharply from December. Operating cash flow was barely there. Accounting profit did not convert to cash because working capital swallowed it. Inventories ballooned, likely a mix of stockpiling and slower turnover. Receivables also rose, suggesting Cadbury extended more credit to distributors to keep volume up. At the same time, the company paid heavy VAT, tax, and made large repayments on intercompany debt and leases. Capex was light, so this was not investment-driven cash burn. It was a liquidity squeeze.
What does this mean? Cadbury is selling more, but keeping less. It is profitable on paper, but cash-constrained in reality. The stronger equity base helps, but with borrowings still high in current liabilities and cash down, the company has less room to absorb another shock.
The takeaway for H2 is clear. Cadbury needs to prove this is more than inflation-led revenue. That means stabilizing gross margins so pricing finally outruns input costs. It means getting selling and admin costs under control instead of spending more to chase the same volume. And most importantly, it means fixing working capital. Until inventories and receivables come down, profit will keep looking good on the income statement while cash keeps leaking from the business.
Right now Cadbury is growing, but it is fragile growth. In this market, fragile growth is the fastest way to run out of runway.
