Mondelez extracted $130m in dividends before quitting Dunedin

Cadbury Staff leave a meeting regarding the closure of the factory. Photo / Christine O'Connor

Mondelez New Zealand Investments pulled out $130 million of dividends from its New Zealand business, more than twice the profits its generated in six years of ownership, before going ahead with shutting down the Cadbury factory in Dunedin.

The local unit of the US food group shipped $25m to its parent in calendar 2016, when it reported a profit of $7.6m, down from $9.2m a year earlier, financial statements lodged with the Companies Office show. The New Zealand entity increased revenue 3.8 per cent to $302.5m, although a higher cost of goods squeezed gross margins to 18.4 per cent from 20.3 per cent a year earlier.

The latest dividend adds to $105m in dividends paid in previous years.

Earlier this year, Mondelez announced plans to close the Dunedin factory, laying off 350 staff in the process, and shifting manufacturing to Australia where it was closer to the Kiwi facility's main customer.

Kraft bought the factory in 2010 as part of an £11.9 billion ($22.3b) takeover of the global Cadbury group, of which the New Zealand assets were worth some $200m. Kraft later spun out its global snacks business and renamed it Mondelez.

In the first year of owning it, Mondelez injected about $80m of new capital into the New Zealand entity.

Since then, Mondelez's New Zealand operations have become closer to the global group, with almost 31 per cent of its sales in 2016 going to related parties, up from just 21 per cent in 2011, and generating profits totalling $47.4m, almost a third of what's been paid out in dividends, and leaving the holding company with equity of $6.4m as at December 31.

The New Zealand holding company also accrued and paid about $43m of interest on a related party loan of $120m between 2011 and 2016. Royalties totalled $47.4m and service fees and marketing rebates totalled $37.2m until 2015, with Mondelez bundling those fees with inventory purchases in the latest accounts.

Mondelez expects to close the Dunedin site and sell the property next year, which it anticipates will see it impair the $53.3m value attached to its property, plant and equipment as at December 31.

Restructuring costs are expected to be incurred from the closure will be incurred in the 2017 statements, the company said.

The candy maker had already cut its wage bill, with staff remuneration down to $34.5m in 2016 from $41.1m a year earlier. Key management and director remuneration fell to $661,000 from $829,000 in 2015.

Separately Mondelez has announced some $3m will be spent revamping the Cadbury World visitors' centre that will remain after the factory is shuttered.

- BusinessDesk