Flour Mills of Nigeria (FMN) Group has achieved a turnover, N524 billion an increase of 53 per cent despite the challenges and unfavourable operating environment it faced in the year under review.
A release by the FMN Group, signed by its Head, Legal Services and Company Secretary, Mr. Joseph Odion Umolu, said the growth was driven by a combination of volume increase, enhanced operating efficiencies coupled with commensurate increases in prices.
However, the group’s financial performance was adversely affected by the impact of over 40 per cent devaluation of the Naira as well as the uncertainties associated with persistent forex scarcity and sharp fluctuations in rates, which we have been able to successfully hedge. We were able to achieve a solid performance owing to our resilience and managerial capabilities.”
The FMN Group noted that the financial year was remarkable for its overwhelming macroeconomic challenges for the Nigerian manufacturing industry, which was a fallout of some global and economic developments, leading to foreign exchange volatility, business uncertainties and a significant weakening of the Naira with negative impact in its business.
The group said that despite those external financial issues, it posted an after tax profit of N8.8 billion, a substantial improvement over the previous year.
It also pointed out that compared with the last two financial years and put in proper perspective, the performance was very impressive, adding that in 2014/15 the group recorded an operational loss of N6.2 billion only made good by the profit on sale of 50 per cent of its equity in UNICEM amounting to N13.9 billion, which ensured a final profit before tax of N7.7 billion. According to the statement in 2015/16, the group also returned an operational loss of N12.7 billion but with sale of investment gain of N23.7 billion of the remaining 50 per cent of our equity in UNICEM giving a profit before tax of N11.5 billion.
The release noted that FMN was able to navigate through the difficult waters leveraging the strength and quality of its brand, Golden Penny, achieving a remarkable growth in revenue but due to the aforementioned unfavourable external factors and conditions, it recorded a marginal decrease in the bottom line.
Revenue of the company grew by 51 per cent from N248 billion to N375 billion. After adjusting for the full impact of the exceptional foreign exchange loss of N6 billion, the company posted an after tax profit of N9.8 billion compared with N10.4 billion recorded last year.
Despite the challenges encountered, the release informed, the directors of the company will be proposing to shareholders at the forthcoming Annual General Meeting, the declaration of a total of N2.62 billion representing dividend payment of N1 per ordinary share of 50 kobo each consistent with payment made in 2016. This is in line with the company’s resolve to maintain consistency in annual payment of dividends to its shareholders, the release said.
During the year, FMN, through substantial investment in its agro-allied businesses, continued its evolution from being primarily a food processing company to a fully integrated consumer foods business supported by a strong internal agro-allied supply chain in the following food value chains – oils and fats, sweeteners, feeds and proteins, starches and agro distribution.
The group believes that this is the most viable and sustainable thing to do to safeguard its future and ensure the sustainability of its business. The emerging macro-economic environment and government initiatives have necessitated a strong “local” input and output drive and FMN is determined to be a part and major contributor to the government’s backward integration policy.