Flour Mills of Nigeria Plc makes over N1 Trillion Revenue in 9 Months

Flour Mills of Nigeria Plc (NGX: FLOURMILL) has reported that it made over N1 trillion for the first time in the 9 months period ended 31st December, 2022.

According to the condensed consolidated and separate interim financial statements of the company for the aforementioned period seen by Investogist, the company reported a revenue of N1.11 trillion. This is 35.03% higher than the N824.98bn the company made in the preceding financial year.

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In a press release accompanying the financial statements release, Flour Mills stated that its Food business recorded 36% top-line growth largely due to its continued focus on retail expansion and proactive pricing to cushion steep input costs.

It also stated that revenue in its Agro-Allied business grew by 39% driven by robust performance across its categories. The Fertilizer business also recorded a 64% growth in revenues and 82% profit growth driven by the commissioning of new fertilizer blending plant in May 2022.

The statement went on to say that oils and fat business grew by 54% driven by increased volumes due to intensified milling activities while its animal feeds business reported 20% topline growth owing to increased product availability.

Golden Sugar was reported to have recorded an impressive 34%
revenue growth; this was achieved due to increased volumes, various customer engagement and popularity of its locally produced brown sugar.

With rising cost of doing business, the company saw its profit for the period drop to N10.01bn, 41.23% lower than the N17.04bn it posted in the preceding year, despite the impressive revenue growth.

Commenting of the financial results, Boye Olusanya, the Group Managing Director of the company said;

“The Q3 earnings trend is a clear demonstration of the Group’s commitment to carrying out its overall long-term strategy of maintaining growth and sustaining profitability by significantly investing in the development of local content through product innovation across our core value chains.

Also, as is established by the significant increase in revenue and growth from the Agro-allied category of the Group’s touchpoints, we are committed to achieving economies of scale in food production via crop-specific value chain by increasing productivity and ultimately driving the nation’s attainment of food self-sufficiency”.

Analysis of Statement of Profit or Loss and Other Comprehensive Income

Revenue: For the first time in its history, Flour Mills revenue crossed the N1 trillion mark in just 9 months. It reported a revenue of N1.11tn, a 35.03% growth from the N824.98bn reported in the preceding year. The Food business segment contributed N724.21bn (9M 2021: N534.47bn) of its revenue, while the Agro Allied business brought in N218.23bn (9M 2021: N157.14bn). Sugar Value chain and Support services brought in N144.85bn (9M 2021: N107.96bn) and N26.65bn (9M 2021: N25.38bn) respectively. The cost of sales went up by 35.71% from N744.76bn to N1.01tn, as material costs (N907.68bn, from N673.25bn) and Power cost (N33.56bn from N17.11bn) amongst others went up significantly. Maintaining its Gross Profit Margin at 9.27% (9M 2021: 9.72%), the company posted a Gross Profit of N103.22bn, 28.69% higher than the N80.21bn posted in the preceding year.
Administrative Expenses: There was a significant increase in the companies administrative expenses; 43.75% up from N21.52bn to N30.94bn. N12.96bn expended on Salaries, wages and other staff costs was the highest item on its administrative expense list (9M 2021: N7.77bn).
Selling and distribution expenses: FLOURMILL spent N13.33bn to sell and distribute its products, 38.32% more than the N9.64bn it spent on the same purpose in the preceding year. Salaries and related staff costs, selling expenses and advertisement with N4.77bn, N5.92bn and N2.63bn respectively made up the selling and distribution expenses.
Profit before tax: FLOURMILL posted a profit before taxation of N14.95bn, 40.79% lower than the N25.25bn it reported for the preceding year. The company went on to pay a total of N4.93bn in taxation (9M 2021: N8.20n). Of the tax paid, N2.95 was income tax, N197.31mn was tertiary education tax, and N748,000 was police trust fund levy.
Profit after tax: The profit after tax dropped from N17.04bn in 9M 2021 to N10.1bn in the period in review, a 41.23% decrease.
Earnings per share: FLOURMILL posted an Earnings per Share of N2.87 for the period under review.

Analysis of Statement of Financial Position

Cash and cash equivalents: The cash and cash equivalent held by FLOURMILL as at December 2022 went up 134.01% to N73.99bn.
Total Assets: The company’s assets went up by 45.69%, from N667.01bn as at 31st March 2022 to N971.74bn. The company’s account and other receivables stood at N46.26bn. N33.94bn of the Accounts Receivables are from trade debtors while N1.65bn are staff debtors.
Loans and borrowings: The company’s loans ballooned by 104.07% to N303.71bn. The major item on its debt books is the N138.25bn Real Sector Support Facility (RSSF) it received.
Total Liabilities: The total liabilities rose by 64.15% to N773.31bn, from the N471.10bn. Other than the N303.71bn loans and borrowings, the company also holds N303.98bn trade and other payables. N183.06bn of tis are trade payables, while N110.53bn are accruals.
Shareholder’s fund: The shareholder’s fund grew marginally by 1.29% to N198.42bn as at 31 December 2022. The retained earnings, the major component of the Shareholder’s fund rose by 2.68% to N114.07bn.

Analysis of Statement of Cash Flow

Operating activities: Flour mills generated N36.10bn from operating activities (N28.89bn was used in the preceding period).
Investing activities: It used N54.69bn in investing activities, most of which was used for the purchase of property, plant and equipment (N34.42bn was used in the preceding period).
Financing activities: N36.75bn was generated from financing activities, as a result of the N79.96bn proceeds from borrowings (N6.95bn was generated from financing activities in the preceding period).

About Flour Mills of Nigeria Plc
Incorporated in September 1960 and quoted on the Nigerian Stock Exchange since 1978, Flour Mills of Nigeria (FMN) Plc, owners of the iconic Golden Penny Food brand is one of Nigeria’s leading food and agro-allied companies.

With a broad basket of food products and robust pan-Nigerian production, distribution, and supply chain network, FMN is a fully integrated and diversified food and agro-allied group.