Cadbury parent books sweet €8.9m profit on sale of Irish coffee business

One of the main Irish subsidiaries of Cadbury-owner Mondelez, which has seen its Irish workforce decline dramatically in recent years, generated a profit of €8.9 million on the sale of its coffee business to Jacobs Douwe Egberts.

Accounts recently lodged for Mondelez Ireland Ltd show the company sold the business in July 2015, as part of a wider group reorganisation.

Turnover at Mondelez Ireland, which continues to sell and distribute confectionary and related goods locally, fell from €215 million to €208 million after the discontinuation of the coffee business.

Overall, the subsidiary recorded a pretax profit of €4.4 million for the 12 months ending December 2015, as against €2.8 million in the previous year.

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Administrative expenses jumped to €26.8 million during the reporting period, up from €18.8 million a year earlier.

There was no breakdown of revenues available but in the previous year confectionary accounted for €175 million of total company turnover, while beverages accounted for €24 million. The company also recorded €15.7 million in food products-related sales during the previous year.

“The market conditions continue to be challenging in all the categories we operate in – confectionary, cheese and grocery – due to the weak economy impacting consumer spending. In addition, the business had to manage commodity and forex headwinds”, the firm said in a note.

“The directors anticipate that the company’s operations will continue to expand its presence in the market with its product portfolio and generate revenue from the exploitation of these products and related service needs,” it added.

Pension scheme

The company, which is one of two Mondelez units in Ireland, also recapitalised its balance sheet during 2015 to address its pension scheme deficit. The parent company, Kraft Food Schweiz Holding, subscribed for the allotment of 1,000 ordinary shares of€1.27 each at an aggregate price of €98 million.

Mondelez Ireland, which employed 120 people at the end of 2015, recorded staff costs of €10.7 million.

Overall, the group employed over 900 in Ireland prior to a restructuring plan initiated in 2014, with the majority of staff on the books of a separate subsidiary, Mondelez Ireland Production Ltd.

Mondelez closed its gum-base production plant in Tallaght in 2014 with the loss of 45 permanent roles. It also cut 160 jobs at its other facilities in Coolock, Co Dublin, and Rathmore, Co Kerry. In addition, the firm announced a €11.7 million investment in new chocolate-making technology at the Coolock facility to concentrate production on core chocolate brands at the same time.

Cadbury built its first Irish factory at Ossory Road, Dublin, in 1933. Kraft Foods acquired Cadbury in 2010, and two years later spun-off its North American grocery division, including Cadbury, and renamed it Mondelez.