By Philemon Adedeji
Flour Mills of Nigeria Plc (FMN), a key player in Nigeria’s food and agro-allied sectors, yesterday announced its unaudited financial performance for the period Q1 2023/2024, showing strong revenue growth across its business segments despite the challenging macro environment.
The group reported revenue growth of 34 per cent in Q1’24 over Q1’23 showed solid performance across all segments (Food, Agro-Allied, Sugar, and Support Segments by 42 per cent, 22 per cent, 21 per cent and 10 per cent respectively), driven by volume growth and a favorable mix.
Overall gross profit grew by 51 per cent in Q1’24, at a higher rate than revenue growth.
Operating Profit before adjustment for foreign exchange losses improved 52 per cent to N31 billion
Overall, Profit Before Tax (PBT) was impacted by N22.5 billion foreign exchange losses during the Quarter leading to a 9.3 billion loss.
However, this is a temporary impact given the timing of the devaluation as of mid-June. FMN has proven its ability to overcome the effects of FX over the years and is comfortable that it will continue to do so.
Net Debt improved by N31 billion in Q1’24 against FY’23, primarily driven by tighter inventory management, reinforcing its commitment to reducing the debt and improving the cash flow.
The recent N85 billion commercial paper issued at an average rate of 11.75 per cent is foreseen to further reduce the financing costs for the balance of the year, and beyond.
Oil and fats business in the Agro Allied segment launched a new product, the Golden Penny Choco Spread with different SKUs confirming our commitment to product innovation and penetration into new markets.
Flour Mills of Nigeria Plc has continued to focus on local content with further backward integration investments
This quarter is marked by strong growth in revenue with Gross profits growing ahead of revenue whilst operating profit fell due to FX exchange losses of N22.5 billion during the Quarter. The quarter in the review also depicts an increased operational efficiency with accelerated plans for cost optimizations across the Group to ensure competitive product offerings and profitability in the new operating environment.
Commenting on the result, the Group Managing Director, Omoboyede Olusanya said:
“As a Group, our commitment to ensuring consistent development of local content and capacities is unwavering, and as we churn out content of superior quality, it is of great importance to us today and in the future that we also continue to drive value for our shareholders. We fully understand the consequences of market volatility especially as it relates to our business environment across various focus areas; thus, we are building the business with so much fluidity so that it can withstand both emerging and existing environmental challenges as we continue to feed and enrich lives, everyday.”