NIGERIA – Flour Mills of Nigeria (FMN) Plc has reported a profit after tax of US$21.7 million for the period nine months ending 31st December 2018 down from US$36.4 million recorded in the same period of the previous year.

This represented a 40.3% decline in profit after tax as total revenues drop from US$1.17 billion in 2017 to US$1.10 billion in the period under review.

The company said that the drop in revenue was attributed to the logistic upheavals posed by infrastructural challenges in Apapa region, the operating base of the company.

On Further analysis of the financial results, the selling and distribution expenses rose from US$11.11 million to US$ 16.33million as the company continued to suffer from the negative impact of the traffic gridlock on the Apapa roads.

However, despite an increase in administrative expenses from US$36.64 million to US$ 41.12 million, FMN’s finance costs reduced by 34% to US$45.42 million, from US$69.37 million of the same period last year.

The company said the decline was driven by settlement of overdraft facilities and replacement of high interest rated loans with more favourable loans.

In 2018, FMN raised rights issue amounting to US$11.01 million to strengthen its capital base by deleveraging its balance sheet, supporting its working capital needs and repositioning the company to exploit value-accretive opportunities.

Paul Gbededo, Group Managing Director FMN however said the results reflects the company’s commitment in its expansion strategy and stands a better chance of exploring other markets.

“The results are largely a reflection of our focus on driving volume growth while improving operational efficiency and ramping up strategic marketing and promotional activities to win over new market segments in our food business.

Despite the devastating effect of the traffic congestions in Apapa on our operations, we are quite positive that we will see improvements across major business segments before the close of the financial year as we continue to focus on delivering on our promise of quality to our consumers,” he said

The company noted that continued strong sales and brand building focus has ensured a further growth in market share and strengthened the group’s market leader position within the flour market.

The agro-allied firm has unveiled plans of carving out its fertilizer business from Flour Mills of Nigeria Plc registering it as an independent entity.

This is part of its strategy as it seeks to reposition the business for further growth and ensure optimal financial structures for the related businesses.

The holding company will be fully owned by Flour Mills of Nigeria Plc.