Flour Mills of Nigeria delivers impressive performance in Q1 2022
By EDU ABADE, Business Editor
Financial results released by the Flour Mills of Nigeria Plc has revealed impressive performance and growth of 45 per cent in the first quarter (Q1) of 2022 over its performance in the corresponding period of last year, as all segments namely: Food, agro-allied sugar and support segments witnessed an upsurge supported by volume growth and favourable mix.
It explained that the positive trend was boosted by increased penetration into new and rural markets, impacted by growth of breakfast cereals in the South East region, The Federal Capital Territory (FCT), Abuja and implementation of innovative marketing strategies to serve rural markets.
It said the company continued to focus on investments in route to consumer redistribution resulting in 8,000 new outlets in Q1 of 2022 and launched new SKUs in the starch and fertilizer business segments and commenced operation of fertilizer blending plant in Kaduna with a 90 tonnes per hour capacity.
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“Gross profits reached N33.2 billion in Q1 of 2022, up from N25.7 billion in Q1 of 2021
Honeywell Flour Mills Plc (HFMP) acquisition was completed in May 2022 and the transitional process resulted in an N1.1 billion deficit for HFMP and N0.4 billion one-off transactional costs for FMN, while earnings before tax growth net of transitional costs would have been 15 per cent compared to the previous year.
“The Group is comfortable with the Honeywell investments and the long-term projections are very positive after having managed the operations since the middle of May.
“Flour Mills of Nigeria Plc remains committed to maintaining growth and sustaining profitability by increasing local content with further backward integration investments.
In its operational review, the company explained that it achieved the feat in spite of increases in prices of inputs in the food segment and continued solid performance in the Agro-allied segment following continuous penetration into new and rural market,” it stated.
Management of FMN further explained that investment in route to customer redistribution and improved customer interface engagement resulted in N7.3bn Profit Before Tax (PBT), which increased marginally by 1 per cent on an absolute basis and 15 per cent on an operational basis when excluding the transitional costs.
“Our sugar segment witnessed a 64 per cent revenue with stabilized trading environments and strong demand for brown sugar which is locally produced at our farm in Sunti. Our animal feeds business attained 21 per cent revenue growth, driven by investments in logistics infrastructure and farmer training extension services across the country,” it added.
Commenting on the results, Group Managing Director, Omoboyede Olusanya, said: “Despite the challenging socio-economic environment, we continue to deliver strong business performance with resilience and operational excellence. Our increased operational efficiency with accelerated plans for our supply chain optimisation, content localisation, and cost optimisation across our business segments has helped to cushion the sharp rise in the cost of raw materials.
“We will remain committed to our purpose of feeding the nation everyday through our offerings of quality products and services. We are dedicated to achieving sector strategic growth opportunities, both organic and inorganic with keen determination as we continue to create value for our shareholders.”