NIGERIA – Flour Mills of Nigeria Plc (FMN), one of Nigeria’s leading integrated food business and agro-allied company, has posted a 16% rise in profit after tax of N5.9 billion (US$16.2m) in its unaudited half year (H1) results compared to N5.1 billion (US$14m) recorded in the same period in 2018.

Amid a challenging operating environment and continuing pressures on the profitability of most companies in the FMCG Sector, the company recorded a profit before tax (PBT) of N8.6 billion (US$23.7m), compared to N8.3 billion (US$22.8m) in H1 of 2018, showing an increase of 4%.

The improved bottom-line was achieved partly due to a decline of 21 per cent in financing cost, which fell to N8.8 billion (US$24.2m) compared with N11.2 billion (US$30.8m) in 2018.

This indicates that the company’s deleveraging strategy and lowered interest rates continue to achieve desired results.

The Group’s sustained growth was further indicated by a volume growth of 6% when compared to the same period of last year.

Although revenue from some of its food businesses was adversely impacted by lower volumes, Pasta and Noodles recorded positive growth in base products and the sugar business continued to show remarkable growth in line with projections.

The Agro-Allied business also continued to show improvements especially in the Animal feeds and Fertilizer segments.

Commenting on the results, the Group Managing Director, Flour Mills of Nigeria Plc, Paul Gbededo said, “I am confident that we are on track to achieve our growth targets for the year as we continue to improve operational efficiency, reduce our finance cost and ultimately grow the wealth of our shareholders by increasing earnings per share.”

FMN turn-around growth initiatives

FMN envisions continuous growth in key segments as strategy to delivered improved margins and operational efficiencies which will in turn result in higher profitability.

The key areas targeted are the continuous implementation of turnaround initiatives in the business, accelerated expansion in the business-to-consumer segment, optimal operation of supply chain and further balance sheet management.

Earlier this year, the company received approval from its shareholders to merge five of its subsidiaries with its holding company under a Scheme of External Restructuring which will lead to higher profit and additional value to the entire group.

The merger involved; Golden Noodles Nigeria Limited, Golden Transport Company Limited, FMN Cement Industries (Nigeria) Limited, New Horizon Flour Mills Limited and Quilvest Properties Limited with Flour Mills of Nigeria Plc.

The company’s directors also proposed to embark on a restructuring exercise that sought to allow each group to focus on its core market and effectively grow market share, reports The Guardian.

This was followed by the Thai Farm International Limited, subsidiary of Flour Mills of Nigeria Plc, changing its corporate name to Premium Cassava Products Limited.

The change in the cassava processing division, which is also a major stakeholder in the industrial production of Garri – Golden Penny was part of the larger group restructuring programme by the FMN management.