Flour Mills of Nigeria to Raise N49bn from Debt Market
Top food producer, Flour Mills of Nigeria (FMN), Plc seeks to raise N49 billion from commercial paper issuance in the local debt capital market. The series 5 commercial paper sales to the investing public have a 270-day tenor at the rate of 14.327% with Nov 15 2024 as its maturity date.
To boost its working capital requirement, the company’s series 5 commercial paper sale is part of the company’s N200 billion commercial paper issuance programme. The company has good ratings, though exposure to FX liabilities damaged its earnings consistently.
In a rating note, Agusto & Co. said it affirmed the ‘A-‘ rating assigned to Flour Mills of Nigeria, reflecting the relative stability in the company’s earnings despite industry-wide challenges of higher foreign exchange losses and rising interest costs during the year.
The rating also takes into consideration FMN’s leading position in the domestic flour milling market and the potential revenue and cost synergies to be derived from the proposed business integration with Honeywell Flour Mill PLC.
In the first half of 2024 result, the food producer’s performance was quite underwhelming, as profitability was significantly impeded by higher operating expenses and net exchange losses, according to Cordros Capital Limited.
According to a recent financial statement posted on the Nigerian Exchange, FMN Plc grew top line substantially, up by about 34% year on year and analysts revealed expectation that Flour Mills’ revenue would sustain its stellar momentum.
In an update, Cordros Capital Limited analysts said they believe the company’s performance will be inhibited by a higher costs outlook in the second half of the financial year 2024 and the sustained impact of higher FX losses on its net operating income. #Flour Mills of Nigeria to Raise N49bn from Debt Market