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.