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Flour Mill records biggest daily gain after revenue jumped 31% in H1’20/21 fin year

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Shares of Flour Mills, Nigeria’s leading integrated food and agro-allied company, jumped the most in over a year by 9.5%, after the firm released its unaudited financial statement for the first six months ended 30th September 2020, showing a 31 percent increase in revenue.

The share price gained N2.30 percent in the Lagos Bourse, Tuesday, to close at N26.50k from an opening price of N24.20, according to Bloomberg data.

In its financial scorecard available on the website of the Nigerian Stock Exchange (NSE), the food and agro-allied company grew revenue by 31 percent to N355.1 billion in the first six months ended 30th September 2020, from revenue of N270.8 billion in the same period last year.

The strong momentum in its aggregate revenue was driven by an increase in revenue witnessed across all four segments of the company, including food, agro-allied, sugar and support services.

In its food business value chain which involves flour milling, production of pasta and noodles, revenue increased by about 30 percent to N215.9 billion from N170 billion, while the Agro-Allied business value chain which involves livestock husbandry, production of livestock feeds, sale of fertilizer, edible oil, farming and other agro-allied activities, grew revenue by 45.9 percent from N49.4 billion to N72.1 billion, the biggest revenue growth in all the four segments.

The sugar business value chain which involves cultivating, processing, refining and selling of sugar, reported a revenue increase of 29.4 percent from N44.9 billion to N58.2 billion, while support business value chain which involves the manufacturing and sales of laminated woven polypropylene sacks and flexible packaging materials, operation of terminals A and B at Apapa Port, customs clearing, forwarding agents, shipping agents and logistics, haulage and real estate, saw revenue increased by 40.6 percent from N6.38 billion to N8.97 billion.

“Similar to our performance over the last few quarters our business has been able to sustain the strong performance in spite of the increasingly difficult terrain and uncertainties. Management remains optimistic that with continued efforts in sales and marketing activities geared at boosting our top line while keeping the costs under control we should be able to sustain the good performance for the remaining period,” the firm said in a statement signed by its company’s secretary, director and legal services, Omolu Joseph.

Unlike other listed companies that run a January to December financial year, Flour Mills financial year starts April of every year to March hence, when other companies are in their 9month period, Flour Mills would be in its half-year period.

Pre-tax profit for the firm increased by 69 percent from N8.83 billion to N14.6 billion, while PAT jumped 68.3 percent to N9.9 billion from N5.9 billion.

The increase in profit before tax was largely driven by the ago- allied segment, which generated a profit of N6.3 billion compared to a loss the previous year.

The agro-allied segment saw very strong improvement in the edible oils and fats, protein and fertilizer businesses following the investments over the years.

Commenting on the result, Paul Gbededo, the group managing director/CEO, stated that the business has once again shown its resilience by following the path of sustainable growth despite the prevailing challenges in both the local and global economy.

He further assured that in line with the company’s vision to continue to grow value for investors, management will for the remaining part of the financial year continue to concentrate on improving operational effectiveness through accelerated strategies for group-wide cost optimization, which will ensure sustainability in the current market climate, while it continues to invest growing the business further