Flour Mills grows Q3 pre-tax profit by 23%
…shares outperform Nigerian Bourse broad index
Flour Mills of Nigeria Plc on Thursday released its third-quarter (Q3) results for the year 2019/2020 showing impressive growth. The Nigeria’s leading integrated food business and agro-allied Group recorded Profit Before Tax (PBT) increase by 23percent to N3.7 billion in Q3, and by 9percent to N12.3 billion nine months period.
The group continues to make progress in its purpose of ‘feeding the nation, everyday’. At N22.35, the share price of Flour Mills has gained 13.5percent this year and has outperformed the NSE benchmark Index.
The Group’s revenue in Q3 2019/20 was N152.7 billion, compared to N130.9 billion in Q3 2018/19 (17percent – YoY growth). For the nine months ended 31st December 2019, Group revenue was N423.5 billion representing a 6percent increase compared to same period last year. Gross profit increased by 11percent in Q3 and by 3percent year-to-date (YtD) Gross Profit is N47.8billion, compared to N46.6billion last year.
Finance cost reduced to N4.3 billion, a significant drop (20percent) compared to N5.3 billion in Q3 2018/19 (21percent year-on-year (YoY) decline). Profit Before Tax increased by 23percent to N3.7 billion in Q3 and by 9percent to N12.3 billion YTD. Net cash generated YTD was N7.9 billion, compared to N7.2 billion in the prior year.
A review of Q3 2019/20 results shows impressive performance across key segments of the business. The Group recorded remarkable growth in its volumes from 6percent during first- half to 8percent in the period under review.
The agro-allied, sugar and food value chains all had impressive results this quarter, with the food business now moving towards expected projections. Gains in the sector can be attributed to a combination of ongoing brand loyalty and refined regional strategies that are designed to increase market penetration. These strategies have been boosted by recent improvements in the domestic market as a result of gains from the boarder closure.
The management’s strategy on increasing the efficiency of its balance sheet and improving working capital continues to yield the desired result, with finance cost recording a steady decline. The Group also plans to issue corporate bonds in Q4.
Commenting on the result, Paul Gbededo, the Group Managing Director, said: “I am pleased with our Quarter 3 results. We have recorded impressive growth in our volumes, and profit before tax increased by 23percent.
“In line with our purpose of ‘Feeding the Nation, Everyday,’ I am positive that we are on the right track as we continue to deliver sustainable value for our stakeholders. Going into the final quarter of the financial year, continued growth is envisaged as we continue to implement targeted strategies, invest in our branding and distribution network and reduce operational costs that will bring even more value in the long run for shareholders,” Gbededo said.