Flour Mills of Nigeria (FMN), an integrated and agro-allied group, saw a 10 percent jump in its profit as revenue from its business improved in the first quarter of 2021.
FMN profit for the period rose from N4.9 billion in the first three months to N5.4percent in the corresponding period of 2021 and its revenue grew 51 percent from N154.6billion in the first quarter of 2020 to N233.7billion in the same period 2021 amid a difficult operating environment and uncertainties.
The leading food provider attributed the revenue growth and profitability in the group performance to its continuous improvement in the food segment and the resultant demand in agro-allied – particularly edible oil and fertilizer business.
“The first-quarter result shows a strong start to the year and a promising indication of the business’s future as we pursue our strategy of operational efficiency and long-term growth,” said Omoboyede Olusanya, group managing director, FMN in a statement while commenting on the financial result.
“I am particularly pleased that we achieved an amazing topline growth and remained profitable, with profit before tax increasing by 12percent and profit after tax increasing by 10percent,” he said.
He noted that as the group continues to execute its long-term strategy of excellence drive growth, it will surely meet its year-end driven growth target, while improving operation efficiency, lowering finance costs, and ultimately increasing shareholder wealth.
Revenue from food, agro-allied, sugar, and support services subsidiaries grew by 61percent, 44percent, 24percent, and 63.3percent respectively compared to a year ago, indicating that there were improved sales for the period.
Flour mills Nigeria saw a 61.3 percent increase in the cost of sales to N208 billion compared to N129 billion in March 2021 and gross profit for the period was N25.7 billion, a 0.7 percent increase from N25.5 billion recorded in the preceding year.
According to FMN, the increase in international food prices and input costs offset 12 percent revenue of the group’s profit before tax, with a time lag to rectify the supply chain impact.
Also, it added that its long-term investment strategy in product development and route-to-market initiatives, with a strong emphasis on backward integration in its food and agro-allied segments, drove growth as well as its improved yearly growth earnings in its food division – edible oil and fertilizer business with a solid operational drive in its B2C segment.
Flour Mill of Nigeria is an industry leader with a market share of 32 percent according to a KPMG wheat sector report and controls over 70 percent of the market; it is also currently the world’s second-largest flour miller and doubles as Nigeria’s largest importer of soft red wheat, hard red winter, and hard white wheat types.