FMN swings to N14.4bn profit on investment income

Flour Mills of Nigeria Plc (FMN), a Nigerian diversified agribusiness company, has swung to an after-tax profit of N14.4 billion in six months ended September 2024, driven by investment income and write-back on trade and intercompany receivables.

The firm bounced back to a profit of N14.4 billion in six months of 2024 from an after-tax loss of N8.38 billion in the same period of 2023.

Further analysis reveals that investment income surged to N4.32 billion from N1.77 billion, while write-back on trade and intercompany receivables stood at N1.31 billion from an impairment loss of N382.6 million.

On the flip side, net operating losses grew to N8.71 billion from N7.75 billion. Exchange loss, however, declined to N46.5 billion from N51.2 billion.

The firm’s finance cost surged to N43.9 billion from N34.6 billion during the reviewed period.

Selling and distribution expenses grew to N28.8 billion from N11.8 billion while administrative expenses increased to N36.4 billion from N25.2 billion.

Flour Mills of Nigeria Plc announced in September 2024 that its majority shareholder has received all necessary regulatory approvals to propose a buyout offer to its minority shareholders.

The process, which is being conducted through a scheme of arrangement, has received a ‘No Objection’ from the relevant regulators, namely the Nigerian Exchange Limited (NGX) and the Securities and Exchange Commission of Nigeria (SEC).

The firm stated that this strategic move, which the company’s board has recommended, offers the majority shareholder the flexibility to properly align the FMN entities according to their peculiarities.

It stated that in addition, it seeks, attracts, and obtains the necessary investment in line with each entity’s vision, with a focus on long-term growth and value. It is also expected to lead to improved management efficiency and decision-making processes, allowing the company to operate more agilely.

Having notified the NGX and the SEC of the offer made by the majority shareholder to acquire the shares of all other shareholders and the resolution of the board to recommend the offer to shareholders for consideration and approval if deemed fit.

An application shall now be filed before the Federal High Court to convene a shareholders’ meeting during which a resolution to buy out minority shareholders will be proposed and passed, if agreeable to the shareholders.

The resolution will be deemed approved if at least 75 percent of the members who are present and voting, either in person or by proxy, support the resolution during the Court Ordered Meeting (COM).

Boye Olusanya, group managing director of FMN, stated, that “In line with FMN’s ambition to become the leading Pan African Food business that feeds and enriches the lives of its consumers every day with quality brands, this move aligns with our strategy aimed at positioning the company to achieve its ten-year vision of building a company that is sustainable, resilient, dynamic, and adaptable in its people, systems, and structures.”