Flour Mills of Nigeria (FMN), one of Nigeria’s biggest millers has reported a 126 percent increase in its Profit After Tax (PAT), credited to product innovation, operational efficiency and expansion of its backward integration program across all value chains.
The firm recently released its 12-months financial performance report for 2021 as it has a unique calendar that ran from March 2020 to March 2021.
Despite prevailing economic headwinds and the difficult operating terrain of Apapa, FMN’s profit after tax reached N25.7 billion as of 30th March 2021, up from N11.4 billion the corresponding period in 30th March 2020.
The FMCG giant posted a revenue increase of 34 percent moving from N573.7 billion in 2020 to N771.6 billion in the year under review, this was primarily driven by the income from the sale of its food products which contributed 62 percent of the total revenue with N478.3 billion.
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Its agro-allied and sugar segment contributed N139.4 billion and N124.6 billion respectively, while it earned N29.1 billion from services rendered. FMN realized 97.6 percent of its revenue in Nigeria while the remaining 2.4 percent was realized from its foreign customers.
The company said that the strong revenue growth for the period was largely driven by the increase in its volume of production, this was evident in its cost of sales which increased 31 percent to N664.8 billion from N507.9 billion in 2020.
Despite the record performances, the company experienced a net operating loss of N15.5billion for the period as against N4.9 billion profit in the corresponding period.
The agro-allied company attributed the losses for the period to the N12.2 billion exchange rate losses and 1.7 billion hedge valuations during the half-year, noting that it had no negative impact in the fourth quarter.
Omoboyede Olusanya, group managing Director, FMN said the company emerged more powerful and resilient despite the impact of the COVID-19 pandemic and other macroeconomic headwinds.
“Flour Mills emerges from the prevailing COVID-19 environment as a stronger, more resilient, flexible, and confident business as a result of the collective strategic actions made over our 60-year history” said while commenting on the result.
Going forward, Olusanya said the miller remains committed to braving a continuously uncertain environment with cautious optimism, innovation, portfolio advancement, and other strategies.
“FMN sees strong organic growth in its business with sustained progress in product innovations and transformation in exciting markets as well as operational efficiencies,” he said.
The company also grew its assets by 26 percent moving from N432.4 billion in 2020 to N544.7 billion in 2021. Furthermore, earnings per share of the group rose by 60.8 percent to N4.92 per share from N3.06 per share in the previous year, the highest in five years.
Following its increase in profitability, the company’s directors are recommending a total of N6.77 billion in dividends for shareholders, at N1.65 per ordinary share of 50 kobo each.
FMN mentioned that it has successfully issued N30bn corporate bond with a tenor of 5 and 7 years at 5.50 and 6.25 percent respectively to replace expensive short-term facilities.
The group is primarily engaged in flour milling, the production of pasta, noodles, edible oil, and refined sugar. It is also involved in farming and other agro-allied activities as well as the distribution and sales of fertilizer.
