Flour Mills of Nigeria Plc (referred to as “Flour Mills “or “FMN”), Nigeria’s leading integrated food business and agro-allied Group, recently announced its audited 2018/19 financial results, ending the year with a strong quarter 4, a full year result that shows a 30% reduction of its financing cost and a strengthened balance sheet, enabling the Group to increase its dividend by 20%.
Revenue declined by 3.37% to N524.41bn from N542.67bn in the previous year. Profit Before Tax also declined by 38.50% to N10.17bn from N16.54bn recorded in the previous year. Profit After Tax also declined by 70.62% to N4.00bn. Net Assets, however, grew marginally by 0.2% to N150.97bn from N150.62bn as at 31st March 2018.
- The Group’s Q4, 2018/19 improved by N1.9 billion, when compared to the same period last year, with full-year Profit Before Tax of N10.2 billion, compared to N16.5 billion in the year ended 31st March 2018.
- Deleveraging continued with total net debt reducing by N21.2 billion and financing costs by 30% (N9.8 billion Naira) to N22.9 billion as at 31st March 2019
- Proposes dividend increase of N0.20k to N1.20k per share. This is subject to shareholders’ approval at the company’s AGM.
- 2019 outlook – Continuous growth is envisaged in key segments such as Food and Agro-Allied, as targeted strategies deliver improved margins and operational efficiencies. Continuous implementation of turnaround initiatives in the Agro-allied business, accelerated expansion in the B2C segment, optimal operation of our supply chain and further balance sheet management is expected to result in higher profitability.
In spite of the prevailing economic headwinds and harsh operating environment which is further heightened by the logistics challenges in Apapa; FMN has continued to make remarkable progress with the Group’s strategic directive to focus on market expansion while realigning its food and agro-allied businesses for sustainable growth and profitability.
In 2018, we undertook a series of strategic actions designed to improve returns and deliver maximum gains for our investors. Top of such actions was the restructuring process that saw all FMN Group businesses in the agriculture sector aligned under Golden Fertilizer company, a fully owned Holding company. The decision has already started to yield appreciable improvements within the group, in the areas of cost maximization and improved operational efficiency as the businesses make the most of their competitive advantage and synergies. This is further supported by the strong cost control measures that have been put in place by management within the year under review,
In the agriculture space, FMN has continued to consolidate on its investments, with a strong focus on innovative and efficient use of resources. Accordingly, the Group is resizing and simplifying the operations of some of the farms which form an integral part of our backward integration strategy with a few of the smaller experimental farms being scaled-down, whereas we continue to focus on the key units.
Commenting on the result, Anders Kristiansson, Group Chief Finance Officer, said: “Our strategy to restructure the balance sheet base and optimize the financing costs have started to yield the desired results, as the business showed increasing levels of efficiency. Despite ongoing pressures on consumer disposable income in many of our target categories, we continued delivered a stronger quarter 4 than last year.”
Paul Gbededo, our Group Managing Director, commented: “We have made substantial progress this year, even in the face of an adverse and challenging business environment. Our growth and efficiency initiatives across our various functions and businesses have started to show anticipated gains as we continue to focus on organic sales growth and position the business for continuous profitability.
FMN has undergone several functional and structural changes within the last year, with innovation and focus on our consumers, at the heart of our strategic direction. We are positive that we will see even greater achievements in our financials in the following quarters as we continue to focus on value creation for our shareholders. To that end, we will be proposing the declaration of a dividend to our shareholders with a significant increase over last year.”