Flour Mills of Nigeria Posts N269bn Revenue in Six Months

Flour Mills of Nigeria Plc (FMN), a leading manufacturer of food and agro-allied products has announced a revenue of N269.737 billion and profit after tax (PAT) of N5.069 billion for the half year ended September 30, 2018.

The company said it increased its market share in some product categories, in a somewhat challenging environment with lower consumer spending.

FMN recorded a 49 per cent increase in selling and distribution expenses to N4.13 billion, compared to N2.77 billion of the same period last year, as it increased its marketing spend.

Administrative expenses rose to N9.852 billion, compared with N8.352 billion, while finance cost fell from N16.267 billion to N11.229 billion in 2018.

The reduction in finance cost came as a result of settlement of overdraft facilities and replacement of high interest yielding loan facilities with cheaper loan facilities.

Investment income grew by six per cent to N290 million, from N270 million of the same period as last year. The increase was due to short-term investments.

However, profit before tax fell to N8.392 billion, from N13.477 billion while PAT stood at N5.069 billion as against N9.355 billion in 2018.

Commenting on the result, the Group Managing Director of FMN, Paul Gbededo, said: “In the face of persistent economic challenges and a difficult operating terrain, we continue to pursue our growth strategy to gain market share in all key product segments. Operations in Apapa continues to suffer major setbacks in traffic and logistics challenges, impacting in a marginal drop in our volume and top line activities.

With improved marketing and promotional activities for most of the key food businesses, we envisage new gains in the remaining part of the year, as we continue to focus on innovative products that deliver on great consumer experience.”

Gbededo had said that the company’s focus remained on growing and building long-term value for stakeholders, following the successful raising of N39.9 billion through a right issue early this year.

FMN made a Rights Issue of 1,476,142,418 ordinary shares of 50 kobo each at N27.00 per share on the basis of nine new shares for every 16 shares to shareholders in January. The issue was well received by its broad retail and institutional shareholder base with a subscription level of 111 per cent.

Gbededo had said the strong appetite exhibited by shareholders was a vote of confidence in the company.

“The Rights Issue is aimed at strengthening our balance sheet and positioning the Company for sustainable growth. We value the strong level of support shown by our shareholders and our focus remains on growing and building long-term value for all stakeholders,” he said.