Profit Jumps 49% as Flour Mills of Nigeria Revved Up Performance
Despite pressure in the economy, Flour Mills of Nigeria Plc on Tuesday reported a revenue of ₦355.11 billion for the half year ended Sept. 30, 2020.
Profit jumped more than 49 percent as company boost demand side amidst hostile business environment in the year.
The company financials shows that FMN Plc performance beats some analysts’ estimates for the period as margin strengthened despite steep rise in inflation in the period.
On the cost side, sales cost adjusted for depreciation grew 27.9% year on year to ₦294.1 billion in the first half of 2021 from ₦229.9 billion in the comparable period.
This is well behind revenue growth of 31.2%, analysts at CSL Stockbrokers Limited said in a commentary note.
“We note the improvement in cost efficiency by the company is driven by investments in agro-inputs, agro-distribution, and aggregation structure of the Agro-Allied business”, analysts said.
Basically, the drivers of growth in cost of dales were material costs which rose 30.1% to ₦266.7 billion and direct staff costs as payroll increased 13.7% to ₦9.6 billion.
These were however reflective of the growth in production volume.
Consequently, Flour Mill gross profit was up 49.3% to ₦61.0 billion for H1 2021 from ₦40.9bn in H1 2020 while.
The result shows that the revenue increased by 31.15 per cent when compared with ₦270.76 billion achieved in the comparative period of 2019.
The company’s profit after tax stood at ₦9.93 billion in contrast with ₦5.90 recorded in the corresponding period of 2019, representing an increase of 68.26 per cent.
Similarly, profit before tax rose by 69.17 per cent to ₦14.61 billion from ₦8.63 billion posted in the comparative period of 2019.
Total assets stood at ₦496.45 billion in contrast with ₦432.45 billion achieved in 2019, indicating an increase of 14.80 per cent.
Commenting on the performance, Mr. Paul Gbededo, the Managing Director, said the result had shown the company’s resilience in spite of the prevailing challenges in the local and global economies.
Gbededo said that the management in the remaining part of the financial year would continue to concentrate on improving operational effectiveness through accelerated strategies for group-wide cost optimisation.
He added that the company would continue to invest in growing the business further.
Read Also: Olam to Acquire Dangote Flour Mills in N130 Billion deals
Profit Jumps 49% as Flour Mills of Nigeria Revved Up Performance
