Harsh operating environment heightened by logistics challenges in Apapa, and economic headwinds ensured an unimpressive performance for food and agro-allied company, Flour Mills of Nigeria Plc.
Figures from the company’s financial result show that revenue plummeted from N542.67bn in 2018 to N527.4bn in 2019. Cost of sale grew from N473.8bn in 2018 to N474.05bn in 2019. Profit after Tax also dropped from 16.39bn to 9.94bn in 2019.
Selling and Distribution expenses ballooned from N6.18bn in 2018 to N8.16bn in 2019, with advertisement expenses surging from N671.63mn in 2018 to 1.79bn in 2019, selling expenses also increased from N3.67bn to N3.73bn in 2019.
Administrative expenses remain flat at N19.42bn however, General administrative expenses surged from 1.32bn in 2018 to 2.30bn in 2019, salaries, wages and other staff costs, increased from N5.64bn to N6.6bn in 2019.
Gross profit from it revenue segment dropped from N68.7bn in 2018 to N53.34bn in 2019.
Analysis from its segment show significant drop in three of its four revenue segment.
Revenue from its food segment which is the milling and sales of flour, rice and production, sales of pasta, snacks, sugar and noodles, tanked from N345.7 bn in 2018 to N335.6bn in 2019.
Revenue from its Agro Allied, which involves farming of maize, cassava, soya, sugar cane and oil palm and production and sales of fertilizer, edible oils and livestock feeds, also dropped from N90.68bn in 2018 to N88.10bn in 2019.
Revenue from its Sugar segment which involves the planting and processing of sugarcane, refining and selling of sugar, and sale of by-products from sugar refining, dropped from N86.18bn in 2018 to N82.69bn in 2019. Revenue from its Support Services however surged slightly from N20.09bn in 2018 to N20.99bn
Earlier this year, shareholders of the company approved a scheme of arrangement to transfer existing assets in one of its division Golden Penny Fertilizer to its wholly owned agro allied company Golden Fertilizer Company Limited. This will make Golden Fertilizer Company Limited will serve as the Holding company for all its Agro-allied businesses.
Flour Mills of Nigeria Plc (FMN) was incorporated on 29th September, 1960 as a private limited liability company with a paid-up share capital of N1 million and converted to a public company in November 1978.
The group is primarily engaged in flour milling; production of pasta, noodles, edible oil and refined sugar; production of livestock feeds; farming and other agro-allied activities; distribution and sales of fertilizer; manufacturing and marketing of laminated woven polypropylene sacks and flexible packaging materials.
Flour Mills is also involved in ports operation of Terminals A and B at the Apapa Port, as well as shipping logistics. Shares of Flour mills traded at N16.20 on the floor of the exchange, with one year return down by 42.46percent.
OLUFIKAYO OWOEYE
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