NIGERIA – Flour Mills of Nigeria Plc, the Nigerian agribusiness company has reported 26% decline in group operating profit from US$41.81 million to US$31 million in the first quarter ended June 30.
Group revenue fell to US$368.33m, down 11% from US$412.37 million a year ago while profit before tax was US$14.40 million for the three months, down from US$17.17 million.
The company in its review of the operating environment stated that inflation rate continues to moderate even though the business environment remained unfavourable during the period.
“Our business succeeded in posting strong performance in spite of the current business challenges, especially due to the persistent Apapa gridlock,” said Joseph Odion A. Umolu, company secretary and director of legal services.
“Management is optimistic that with continued effort to increase sales and marketing activities geared at boosting our top line we should be able to sustain the good performance for the remaining period.”
The food, agro-allied and logistics firm recorded an Increase of about 15.6% in administrative expenses which is mostly driven by higher cost of employment and other general overheads.
The company reduced selling price for its flour and sugar business and its edible oil business are yet to fully deliver on its growth objectives.
Its food revenue growth was driven mostly by its pasta, noodles and sugar business offset by lower selling prices in flour and sugar while animal feed market was weighed down by increased competition.
FMN’s 2017-year end results recorded 3.3% year on year growth in group revenues to US$1.50 billion and the company alluded the growth to a combination of resilience in the face of a challenging environment, volume growth and product mix from its food and agro-allied businesses.
In May, the agri-company formed a partnership with Corteva AgroSciences, Agriculture Division of DowDuPont for maize hybrid seed development in Nigeria.