Flour Mills reports N19.5bn nine months pre-tax profit

by | February 1, 2018 12:23 am

The unaudited financials of Flour Mills of Nigeria Plc for the nine months period ended December 31, 2017 shows the group earned N427.5billion, up from N389.9billion in the same period of 2016. The results submitted at the Nigerian Stock Exchange (NSE) show the Group reported operating profit of N44.19billion against N27.26billion in 2016. 

The group succeeded in posting strong performance in spite of the current business challenges especially due to Apapa traffic congestion.

The management of Flour Mills of Nigeria Plc is optimistic that with continued efforts to increase sales and marketing activities geared at boosting the group’s topline, they should be able to sustain the good performance for the remaining period.    

The group profit before taxation (PBT) increased in the period under review to N19.5billion against N10.29billion in same period of 2016. In the nine-month period to December 2017, the group’s profit after taxation (PAT) increased to N13.27billion from a low of N7.4billion in nine month period of 2016. 

Despite this impressive result, the stock price lost 5kobo on Tuesday to close at N30.85, down from preceding day high of N30.90kobo.

As part of a strategic measure to consolidate operations, create value for shareholders and enhance administrative and operating efficiencies, the company in Q2 2017, announced the completion of a merger and absorption of Golden Penny Rice Ltd, a wholly owned subsidiary, into Flour Mills of Nigeria Plc.

It is expected that the restructuring will meaningfully improve the synergies of the Group, reduce costs and improve the competitiveness of the company’s products, with the aim of advancing the profitability of the Group.

The Rights Issue of Flour Mills of Nigeria Plc of 1,476,142,418 ordinary shares of 50 Kobo each at the offer price of N27per share opened for subscription from Monday January 15, 2018. The acceptance list closes on Wednesday February 21, 2018

Flour Mills of Nigeria is seeking to raise approximately N40billion in new equity funds from existing shareholders. Flour Mills of Nigeria Plc if looking to raise fresh capital by offering existing shareholders nine (9) new ordinary shares for every sixteen (16) ordinary shares held as at December 8, 2017. 

It will be recalled that to combat the traffic challenges posed by the difficult road conditions in Apapa that have negatively impacted business logistics and, correspondingly, the company’s performance, and to generally aid the ease of doing business in Apapa, Flour Mills of Nigeria plc is partnering with other stakeholders (with a contribution of about N750 million) to rehabilitate Apapa Wharf Road and manage the traffic congestion in Apapa. This is as part of our Group’s Corporate Social Responsibility (CSR).

Wheat milling forms the financial backbone of the diversified company. Flour Mills of Nigeria Plc pioneered flour milling in Nigeria when its first mill was commissioned at Apapa in 1962 with a grinding capacity of 500 metric tonnes of wheat per day. Today, the Apapa milling complex has a rated capacity of over 8,000 metric tons per day making it one of the largest single site mills in the world. 

In 2017, the Group increased its shareholding in one of its subsidiaries, Rom Oil Limited (ROM), Ibadan, from 90percent to 95percent which makes it the largest shareholder of Rom Oil Mills, while the Shahimi family collectively owns 5 percent minority shares in the equity of ROM.

In its over five-decade history, FMN’s flagship food brand, “Golden Penny”, continues to be one of the best known and the preferred brand amongst bakers, confectioneries and consumers in Nigeria. The “Golden Penny” basket of foods has now grown to include products such as semovita, masavita, pasta, noodles, refined sugar, margarine, vegetable oils, and a range of snacks and breakfast cereals, instantly recognizable in any Nigerian household.

Flour Mills of Nigeria first investment outside Flour Milling was in BAGCO in 1978. BAGCO now a Division of FMN is a pace setter in woven polypropylene sack manufacturing.  With its two giant plants at Lagos and Kano, it is by far the largest and supplier of choice to many industrial and agro-allied companies in Nigeria in the packaging of flour, cement, grains, salt, detergent, fertilizer, merchandise, farm harvests, shopping, and so on.