Northern Nigeria flour mills sees first nine-month profit in five years

Northern Nigeria Flour Mills (NNFM), a listed miller on the Nigeria Stock Exchange has turned the corner to post its first nine- month profit in five years, thanks to the surge in revenue.

The Kano-based miller recorded a profit of N51.2 million for the nine-month period ended 31st December 2020 from a loss of N212.2 million in the same period of 2019.

The company says the increase in profitability came on the back of increased revenues and sales volume.

Revenue surged 29 percent to N6.45 billion in the period compared to N5.0 billion in the first nine month of 2019.

The profit growth can also be traced to a 270 percent surge in investment income to N35.9 million from N9.7 million in the same period of 2019.

Borrowing cost also dropped 49.7 percent to N146.9 million in the nine month period of 2020 compared to the N292 million in the same period of 2019. Shares of the company remained flat at N7.02 at the close of trade, Thursday.

The miller’s basic earnings per share stood at N29 per share from a negative share price of N119 per share in the periods under review.

Cost of sales was up 12.8 percent to N5.98 billion from N5.3 billion in the nine-month period of 2019.

Despite the surge in sales cost, gross profit rose to N470.6 million compared to loss of N299 million a year before. NNFM saw its selling and distribution expenses rose 130 percent to N60.3 million compared to N26.2 million in 2019.

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Administrative expenses also jumped 37.8 percent to N321.8 million to N233.4 million in the periods under review.

The company paid no tax in the nine-month period of 2020 compared to a tax of N6.1 million paid in the same period of 2019.

Operating profit grew by 127.8 percent to N162.2 million from N77.1 million in the same period of 2019.

“The Management is working towards improving margins in the next quarter,” the company explained in its financials.

Northern Nigeria Flour Mills Plc is a milling company. The Company produces flour and semovita.