Flour Mills’ annual profit hits N28bn, highest in 7 yrs

Flour Mills of Nigeria Plc has released its audited financial results for the period ended March 31, 2022, showing impressive growth.

The company, which aside from flour manufacturing, produces pasta, sugar, vegetable and soya oils as margarine, earned the bulk of the revenue from sale of goods with the balance coming from rendering of services.

The company’s profits recorded a slight 9 percent increase to N28.01 billion in March 2022 from N25.7 billion in March 2021.

Revenue stood at N1.16 trillion, coming from N771.6 billion in March 2021.

In March 2022, Flour mill’s revenue from sales of food, agro allied, sugar contributed N748.76 billion, N213.37 billion, and N156.02 billion respectively.

The company also rendered support services which grew 56 percent to N45.6 billion from N29.2 billion in the comparable period.

In March 2022, sales of goods contributed N742.4 billion which entails food, agro allied, sugar with N478.3 billion, N139.4 billion and N124.6 billion respectively.

Flour mills support services rendered contributed N29.2 billion to its total revenue of N771.6 billion in March 2021.

Gross profit increased by a slight 1 percent to N108 billion from N106.7 billion in the period under review.

Cost of sales reached N1.055 trillion in March 2022 compared to N644.8 billion in the prior year.

A chunk of this was the higher cost of raw and packing materials (N958.0 billion versus N583.6 billion in 2021), an increase in fuel and oil to N23.1 billion from N17.8 billion, a jump in factory repairs and maintenance to N16.1 billion from N11.8 billion and an increase in other production expenses to N12.5 billion from N8.6 billion.

And that could prove more burdensome this year given that Nigeria hinges on importation to meet about 98 per cent of its wheat need and the war between Russia and Ukraine (both of them among the world’s top five wheat producers) is bound to heap more pressure on prices.

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Investment income dropped 70 percent to N1.08 billion as against N3.65 billion in the corresponding period.

The miller’s total assets stood at N667 billion, a 22 percent increase from N544.7 billion in the comparable period.

The company’s selling and distribution expenses dropped 8 percent to N11.08 billion from N12.08 billion in the period under review.

Inventories jumped to N284.4 billion from N195.4 billion, indicating a 45 percent increase.

Similarly, trade and other receivables increased by 55 percent to N40 billion from N25.8 billion.

Administrative expenses rose by 9 percent to N31.77 billion in March 2022, coming from N29.04 billion in March 2021.

The company’s finance cost rose by 36 percent to N25.48 billion in March 2022 from N18.65 billion in the previous year.

Prepayment climbed 18.6 percent to reach N55.29 billion, coming from N46.6 billion in the same period last year.

Net cash from operating activities reached N44 billion, a 47 percent increase from N29.8 billion in the comparable period.

Flour Mills’ net cash from investing activities recorded N44.8 billion from N18.4 billion year-on-year loss.

Net cash generated from financing activities dropped to a loss of N11.37 billion from a gain of N648.7 million in March 2021.

In April, Flour Mills of Nigeria, currently Nigeria’s biggest consumer goods company by revenue, got regulatory approvals to acquire a combined 76.8 per cent stake in rival Honeywell Flour Mills, with the latter’s enterprise value put at N80 billion.

Flour Mills also controls a 53.1 per cent stake in another listed firm Northern Nigerian Flour Mills.

Analysts estimate the latest acquisition moves narrow competition in a market where, as early as 2016, Flour Mills, Honeywell and Singaporean firm Olam together control over 70 per cent of the market.

In a separate note to the Nigerian Exchange on Tuesday, the board of Flour Mills proposed a dividend of N2.15 per share equivalent to N8.8 billion. That implies a 30 per cent increase over the payout for the financial year 2020.