Flour Mills records 45.3% revenue growth in Q1 2022 amid headwinds

…increased penetration into new and rural markets

For the first quarter ended June 2022, Flour Mills Nigeria, a leading integrated and agro-allied group grew its revenue by 45.3percent to N339.6billion from N233.7 billion recorded in the same period of 2021 amid economic headwinds.

The leading agro-allied group attributed the solid performance across all segments (food, agro-Allied sugar, and support segments), which was supported by volume growth and a favourable mix.

Despite the impact of surging commodity prices, rising energy costs and FX scarcity on its business operations, the company recorded a profit after tax of N7.33 billion for the period, from N7.26 billion million recorded in the first quarter of 2021.

The food manufacturer struggled to keep costs down as sales costs went up 47.3percent to N306.35 billion in q1 2022 compared to N208 billion in the same period in 2021.

Also, its finance costs jumped 79 percent to N8.15 billion from April through June 2022 from N4.55 billion in the same period of 2021.

Gross profit grew by 29 percent to N33.2 billion in q1 2022 from N25.7 billion in the same period of 2021. Administrative expenses also jumped to N10.07 percent in Q1 2022 from 6.59percent in 2021, up 52.8 percent.

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“Despite the challenging socio-economic environment, we continue to deliver strong business performance with resilience and operational excellence,” Omoboyede Olusanya, group managing director, FMN said in a statement.

“Our increased operational efficiency with accelerated plans for our supply chain optimization, content localization, and cost optimization across our business segments has helped to cushion the sharp rise in the cost of raw materials,” Olusanya said.

“We would always be committed to our purpose of feeding the nation, every day through our offerings of quality products and services,” he added.

He noted that the group is dedicated to achieving sector strategic growth opportunities, both organic and inorganic with a keen determination to continue creating value for its shareholders.

During the accounting year, FMN launched new SKUs in its starch and fertiliser business segments and commenced the operation of a fertiliser blending plant in Kaduna with 90 tons per hour capacity.

The food manufacturer said it increased its penetration into new and rural markets such as the growth of its breakfast cereals in the eastern region of the country, Abuja and the implementation of innovative marketing strategies to serve rural markets.

The leading agro-allied firm confirmed it completed its acquisition of Honeywell Flour Mills (HFMP) in May 2022 and that the transitional process resulted in a deduction of N1.1 billion deficit for HFMP and N.04 billion one-off transactional costs for FMN.

It noted that the group is comfortable with the Honeywell investment and the long-term projections are very positive after having managed the operations since the middle of May.

Earnings per share rose by 17 percent to N137 in the first quarter of 2022 from N117 per share in the same period of 2021.

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