LAGOS, NIGERIA — Flour Mills of Nigeria Plc (FMN) on July 22 reported profit after tax for the year ended March 31 of 10.4 billion ($34 million), which represents an increase of 334% from naira 2.4 billion ($7.8 million) for the previous year.
It attributed the increase to volume growth and efficiency gains. The company also said benefits from the sale of its investment in United Cement Company of Nigeria (UNICEM) helped improve the bottom line. The company said it sold its holdings in UNICEM to focus on the growth of its core food and agro-allied businesses.
FMN revenue for the year was naira 248 billion ($811 million), up 8% from the naira 230 billion last year.
The Flour Mills Group reported profit after tax of naira 14.4 billion ($47 million), up 71.4% from naira 8.4 billion for last year. Revenue was up 11% to naira 342 billion ($1.1 billion).
Costs of sales was impacted by higher cost of foreign currency due to foreign market deregulation, resulting in a closing blended exchange rate of naira 295 to $1 against a CBN rate of naira 197.50. The company said it was able to offset impact on its bottom line by gradual increases in the selling prices of its products.
The company said management is determined to further restructure operations, streamline business operations to focus on its core businesses, and monitor and manage costs to hedge against further economic challenges.
Despite the daunting economic challenges, the company said it directors are proposing at the next shareholder meeting a declaration of naira 2.62 billion representing dividend payment of naira 1 (0.0033?) per ordinary share of 50 kobo each.
During the year, Flour Mills of Nigeria increased its investments in Agro Allied businesses so it now grows and processes corn (maize), soybeans, sorghum, sugarcane, palm oil, rice, cassava and poultry. It also supplies fertilizer and agri sacks to the Nigerian market.
“FMN’s goal is to be involved at all stages of the food value chain where a profitable and sustainable agro-allied platform of cultivating and processing locally produced raw materials will ensure the growth and success of our food business,” said Paul Gbededo, group managing director.
“We shall continue to leverage on the unassailable quality of our flagship product, Golden Penny Flour; the growing popularity and market acceptability of our sugar brand; our continuous investment in new milling technology; our major investments in agro-allied businesses; development and introduction of new products in response to evolving consumer expectations; and our strengthened Pan Nigerian products distribution network to generate improved earnings and deliver superior shareholder value.”