Coca-Cola Attributes $393m Loss to Chi Limited Divestment

The Coca-Cola Company has reported a significant $393 million loss for the third quarter of 2025, attributing the setback primarily to the sale of its subsidiary, Chi Limited, a major player in Nigeria’s beverage and dairy market. The company disclosed that the divestment of Chi Limited, along with adjustments related to foreign exchange and restructuring costs, were major contributors to the reported decline.

According to Coca-Cola’s latest financial statement released on Monday, the company said the decision to divest from Chi Limited was a strategic one aimed at streamlining operations and focusing on its core beverage portfolio. The company noted that while the sale led to a one-time accounting loss, it aligns with its long-term plans to optimize profitability and strengthen its global operations in high-performing segments.

In a statement accompanying the results, Coca-Cola’s Chief Financial Officer, John Murphy, explained that the $393 million loss was not a reflection of poor performance in its core markets but rather a result of “structural realignment and portfolio optimization.” He added that the decision to exit certain non-core businesses, including Chi Limited, was based on a comprehensive review of Coca-Cola’s business operations across Africa and other emerging markets.

“The divestiture of Chi Limited represents a strategic shift in our business focus. While this resulted in a short-term loss due to asset valuation and foreign exchange impacts, we remain confident that our streamlined structure will enhance long-term growth and shareholder value,” Murphy stated.

Chi Limited, founded in 1980, became a full subsidiary of Coca-Cola in 2019 after the multinational beverage company acquired the remaining stake in the Nigerian firm. The company is best known for its fruit juices, dairy products, and snacks, including popular brands such as Chivita, Hollandia, and Capri-Sonne. Over the years, Chi Limited helped Coca-Cola expand its product reach in the West African market beyond carbonated drinks, tapping into the fast-growing fruit juice and dairy segments.

However, industry analysts say Coca-Cola’s decision to divest from Chi Limited reflects broader challenges facing multinational firms operating in Nigeria. Persistent foreign exchange volatility, inflationary pressures, and rising production costs have eroded profit margins, prompting several foreign companies to review or scale down their operations in the country.

An investment analyst with Afrinvest, Tunde Ajayi, noted that Coca-Cola’s divestment may have been influenced by Nigeria’s ongoing macroeconomic challenges. “The naira depreciation and inflationary environment have made it difficult for companies with imported raw materials to sustain profitability. Coca-Cola’s exit from Chi Limited may be part of a broader strategy to minimize exposure to high-risk markets,” he said.

Despite the loss, Coca-Cola emphasized that Africa remains a key growth region for the company. It reiterated its commitment to strengthening its beverage operations and expanding investments in core brands such as Coca-Cola, Fanta, Sprite, and Schweppes. The company also said it would continue to partner with local bottlers to enhance production and distribution efficiency across the continent.

Coca-Cola’s Chief Executive Officer, James Quincey, in his remarks, described the restructuring as necessary to ensure resilience in a volatile global market. He noted that the company is increasingly focusing on digital transformation, supply chain efficiency, and product innovation to sustain growth amid global economic uncertainty.

“Our performance in several key markets, including Africa, remains robust. The divestment in Chi Limited allows us to focus on categories where we can achieve greater scale and operational efficiency. This is part of our ongoing commitment to adapt, simplify, and accelerate growth,” Quincey said.

In Nigeria, Coca-Cola continues to operate through the Nigerian Bottling Company (NBC), which remains one of the largest beverage bottlers in West Africa. NBC has recently announced several initiatives, including investments in renewable energy, water stewardship, and sustainable packaging, as part of Coca-Cola’s broader sustainability goals.

Meanwhile, the sale of Chi Limited has sparked discussions about the future of the Nigerian beverage and dairy sector. Market watchers say the exit of Coca-Cola from Chi could create opportunities for new investors and local players to take over the brand’s strong product portfolio and market share.

A Lagos-based economist, Dr. Funmi Oladipo, noted that while the sale might be seen as a short-term setback, it could open new possibilities for domestic investment. “Chi Limited remains a strong brand with deep market penetration in Nigeria and West Africa. If managed effectively by its new owners, the company could still thrive under local leadership,” she said.

The Nigerian beverage industry has faced multiple headwinds over the past year, including soaring input costs, dwindling consumer purchasing power, and rising energy prices. Nonetheless, demand for non-alcoholic beverages continues to grow, particularly among younger consumers and urban populations.

Coca-Cola’s report also indicated that despite the one-time loss, the company’s global revenue grew modestly by 4% year-on-year, driven by higher sales in North America, Latin America, and parts of Asia. The company stated that it expects profitability to rebound in subsequent quarters as restructuring benefits begin to materialize.

The sale of Chi Limited is part of a broader trend among multinational firms adjusting their portfolios to navigate difficult economic environments. Similar strategic exits have been recorded in other African markets, as companies seek to focus on high-return operations and divest from businesses with limited scale or high operational risks.

Coca-Cola reaffirmed that it remains deeply committed to Nigeria and Africa’s long-term potential, pledging to continue investing in innovation, sustainability, and community development. While the short-term impact of the Chi Limited sale has affected its financials, the company remains optimistic about its future growth trajectory.

The company concluded that its restructuring efforts would lead to a leaner, more agile organization capable of delivering strong value for shareholders and maintaining its leadership position in the global beverage industry.