Flour Mills of Nigeria showcases robust growth, reports 49% growth in top line performance

NIGERIA – Flour Mills of Nigeria Plc, Nigeria’s leading integrated food and agro-allied business has reported 51% growth in revenue in its third quarter period, and 49% in 9 months.

The stellar performance is attributed to continuous product innovation, improved capacity utilization, and effective route to market strategies aided the group’s outstanding financial performance across its core business segments.

Under the food division which includes sales of its flour milling business, pasta and noodles delivered revenue rise of 55.3% in the 9 months.

According to the owner of the Golden Penny brand, food segment displayed increased momentum in retail, boosting profitability during the quarter.

Top line improvement was driven by 18% volume growth alongside sustained demand in the segment.

Meanwhile, the Agro-Allied division which involves livestock husbandry, production of livestock feeds, sale of fertilizer, edible oil, farming and other agro-allied activities attained a revenue jump of 48.9%.

Persistent good operating performance in the Food segment; continuous improvement in the Agro-Allied and Support segments alongside strong volume growth resulted in an impressive Profit Before Tax of N25bn in 9 months and N9.8bn in Q3 – up 7% and 8% respectively.

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It is important to note that the Agro-Allied segment contributed 42% to the group’s Profit Before Tax following the increase in local demand and improved export operations.

The Group’s strong operating performance was also supported by the increase in CAPEX investments from N10bn to N33bn and enhanced sourcing of local raw materials during the harvest period in comparison to the previous year, evidencing strong focus on expansion while maximizing growth prospects.

“The Group remains committed to executing its overall long-term strategy to maintain growth and sustain profitability by increasing local content through product innovation across our core value chains, as evidenced by the third-quarter’s earnings trend.

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“In our new operating environment, our increased operational efficiency and accelerated optimization plans have resulted in competitive product offerings and profitability,” Omoboyede Olusanya, the Group Managing Director, said.

Flour Mills of Nigeria eyes future growth

The company is set to continue investing in production capacity and make investment decisions that will strategically position the group for the opportunities that will arise from the African Continental Free Trade Agreement.

As part of its expansion plans to meet growth demands, the Group installed a new pasta line, concluded the construction of a soya plant in Agbara, and purchased sixty new trucks during the review period.

Still in the pipe-line is completion of its Kaduna Feed Mill that is projected to be operational in May 2022.

The food processor is also seeking to stamp dominance in the wheat industry with the acquisition of majority stake in the country’s leading manufacturer of diverse and differentiated range of wheat products, Honeywell Flour Mills Plc (HFMP).

Under the proposed agreement, HFMP’s parent company Honeywell Group Limited will dispose 71.69% stake in the wheat milling outfit to FMN based on an enterprise value of N80 billion (US$193m).

Upon completion, HFMP’s wide range of offerings: wheat flour, noodles, semolina, pasta and wheat meal sold under the famous Honeywell brand, will join FMN’s market-leading offerings produced through its affiliates comprising: grain-based foods, sugar, starches, oils, spreads and breakfast cereals sold under the house-hold name Golden Penny.

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