Flour Mills of Nigeria (FMN) Plc has reported a profit after tax of N7.895 billion for the nine months ended December 31, 2018, down from N13.247 billion recorded in corresponding period of the previous year. The profit was recorded from a revenue of N400.6 billion compared with N427.508 billion in 2017.According to the company, The drop in revenue is disappointedly related to the logistic upheavals posed by the traffic challenges in Apapa.
An analysis of the results showed that selling and distribution expenses rose from N4.037 billion to N5.933 billion as the company continued to suffer from the negative impact of the traffic gridlock on the Apapa roads, the operating base of the company. Also, administrative expenses increased from N13.311 billion to N14.937 billion.
However, company’s finance cost of reduced by 34 per cent to N16.5 billion, from N25.2 billion of the same period last year. The company said the reduction is due to settlement of overdraft facilities and replacement of high interest yielding loans with more favorable loans.
FMN had last year raised Rights Issue of N40 billion to strengthen its capital base by deleveraging its balance sheet, supporting its working capital needs and positioning its to exploit value-accretive opportunities.
Commenting on the result, the Group Managing Director, FMN, Paul Gbededo, said:“The results are largely a reflection of our focus on driving volume growth while improving operational efficiency and ramping up strategic marketing and promotional activities to win over new market segments in our food business. Despite the devastating effect of the traffic congestions in Apapa on our operations, we are quite positive that we will see improvements across major business segments before the close of the financial year as we continue to focus on delivering on our promise of quality to our consumers.”
The company noted that continued strong sales and brand building focus has ensured a further growth in market share and strengthened the group’s market leader position within the flour market.
The Group has announced its intent to carve out its fertilizer business from Flour Mills of Nigeria Plc and registered same as an independent company to hold its Agro-allied businesses. This is expected to position this business segment for further growth and ensure optimal financial structures for the related businesses. The holding company will be fully owned by Flour Mills of Nigeria Plc. The arrangement is however subject to the approval of the Securities and Exchange Commission.