‘Nigerian flour milling industry driving profitability despite turbulence’ | Dailytrust

‘Nigerian flour milling industry driving profitability despite turbulence’

These are troubling times for most businesses as some are reeling under the aftermath of post COVID-19 lockdowns and a recession.

However, for companies with bespoke businesses strategies and good corporate governance credentials, they are still profitable. Flour Mills of Nigeria is one of those. It’s 2020 financials show an increase in profit before tax of N13.4 billion from a break-even situation in the same period last year by the Group.

The chairman of Flour Mills of Nigeria, John Coumantaros, speaking to shareholders at the AGM recently, said despite the current COVID-19 severe environment, the group delivered an impressive year-over-year top-line growth with an average revenue rise of 34 per cent across all business categories.

Coumantaros noted that the directors proposed the payment of a dividend of N1.65 per share, a 17 per cent increase over last year, stressing that to complement growth strategy, “management is keeping reserves to fund additional investments in important business categories, such as local content creation and the Company B2C route to market strategy.”

The Group Managing Director of FMN, Omoboyede Olusanya, said: “Over the years, the group has advocated for and supported the expansion of agriculture in Nigeria, believing that a rapid transformation in the domestic agricultural output and yield is the major catalyst for the country’s industrial transformation.

He also said that: “We implemented a turnaround strategy in the agro-allied segment, which included deliberate efforts to acquire raw materials from a network of smallholder farmers and young entrepreneurs.”

The company’s balance sheet shows that its integrated foods and agro-allied firm’s Q1 2021 results reported 12 per cent increase in Profit Before Tax to N7.3bn in Q1 2021, compared to N6.5bn in Q1 2020, while Profit After Tax rose by 10 per cent to N5.4bn in Q1 2021, compared to N5bn in Q1 2020.

Volume and revenue continued to appreciate despite increases in international food prices and input costs during the review period.

“I envision even more organic growth across the group, fuelled by our expanding ethos of putting consumers at the heart of our business. As we continue to execute our long-term strategy of excellence-driven growth, I am optimistic that we will meet our year-end growth targets while improving operating efficiency, lowering finance costs, and ultimately increasing shareholder wealth,” Olusanya said.