NIGERIA – Nigeria’s leading integrated Food and Agro-allied group, Flour Mills of Nigeria Plc, has reported a 38% rise in half year revenue in the period ended September 2022, from N522.821 billion (US$1.19 billion) attained in the previous corresponding period to N720.576 billion (US$1.164 billion).

The overall revenue growth was driven by improvements in the food and agro-allied segment of the Group, despite inflationary pressure and slim household wallets, alongside favourable mix and some exchange-related pricing.

The owner of Golden Penny brand, highlighted that its food segment contributed 61.84% of the total revenue with N445.671 billion (US$1.01 billion), followed by the agro-allied segment which contributed 21.35% of the revenue with N153.901 billion (US$350m).

Revenue from the food segment grew by 32.07% from N337.45 billion (US$767m) in H1 2021, while revenue from agro-allied increased by 52.3% from N101.06 billion (US$230m) reported in H1 2021.

Other than the two major segments, earnings from its sugar business increased from N69.5 billion (US$158m) to N104.66 billion (US$238m), while revenue from “Support service” moved to N16.34 billion (US$37.1m) in H1 2022 from N14.81billion (US$33.7m) in H1 2021.

The company’s cost of sales increased 39% to N651.789 billion (US$1.48 billion) compared to N468.406 billion (US$1.07 billion) during the same period in 2021.

The group’s total operating expenses rose by nearly 14 per cent to N26.03 billion (US$59.2m) in H1 2022 from N22.84 billion (US$51.9m) in H1 2021, driven by administrative expenses.

Operating income closed H1 2022 at N30.33 billion (US$69.03m), representing an increase of 26.1% from N24.05 billion (US$54.7m) in H1 2021.

Meanwhile, finance cost grew by 139.3 per cent to N22.32 billion (US$50.8m) in H1 2022 from N9.33 billion (US$21.2m), attributable to hike in interest income paid on borrowed funds.

This led to drop in profit before tax to N8.38 billion (US$19.7m) in H1 2022 from N15.48 billion (US$35.2m) reported in H1 2021, and profit after tax dropped by 46% to N5.7 billion (US$12.97m) in 2022 from N10.528 billion (US$23.9m) in 2021.

The company added is integrating the Honeywell business into its operations to realize the synergies anticipated with a focus on restructuring the balance sheet to reduce FX exposure and ensure manufacturing stability. This is expected to lead to strong results in the long term.

Flour Mills of Nigeria (FMN) acquired a 71.69 per cent stake in Honeywell Flour Mills Plc. (HFMP) and a 5.06per cent stake in HFMP held by First Bank of Nigeria Limited, earlier in the year.

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