Flour Mills of Nigeria, Mixta Real Estate Shop for N13bn CP

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MARKET REPORT:

Goddy Egene

 Flour Mills of Nigeria Plc and Mixta Real Estate Plc are raising N12 billion and N3 billion   in commercial paper respectively to support their short term funding requirements. 

While Flour Mills of Nigeria Plc is raising the N12 billion in the series 8 of its N100 billion CP programme, Mixta Real Estate is raising N3 billion in the third and fourth series of its N15 billion CP programme.

The Flour Mills CP has a tenor of 270 days and a yield of 13.1 per cent. The offer opened on Wednesday May 22, and would close tomorrow, May 28, 2019.

On the other hand, Mixta Real Estate  series six is for 180 days with a yield of 14.67 per cent, just as  the series 7 is for 266 days and has a yield of 15.36 per cent. The offer opened on Thursday May 23, 2019 and will close today.

Flour Mills of Nigeria has been making efforts to reduce its financing costs. That effort led to  an injection of N40 billion  equity  into  through a rights issue last year.  That move  paid off for the company in  its nine months results when finance cost reduced by 34 per cent  to  N16.5 billion, from   N25.2 billion of the same period last year.

According to the company,   the reduction is due to settlement of overdraft facilities and replacement of high interest yielding loans with more favorable loans.

Flour Mills of Nigeria Plc last week reported a profit after tax of N7.895 billion for the nine months ended December 31, 2018, down from N13.247 billion recorded in the   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 was  disappointedly related to the logistic upheavals posed by the traffic challenges in Apapa.

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.