Flour Mills Nigeria PLC (FLOURM.ng) Q12023 Interim Report
Delivers solid performance despite a challenging economic environment Lagos, Nigeria; July 29, 2022.
Highlights of the Q1 business performance
- Topline growth of 45% in Q1’22 over Q1’21 showed solid performance across all segments (Food, Agro-Allied Sugar, and Support Segments), which was supported by volume growth and a favourable mix.
- Increased penetration into new and rural markets e.g., growth of breakfast cereals in the Eastern states, Abuja, and implementation of innovative marketing strategies to serve the rural markets.
- Continued to focus on investments in route to consumer redistribution resulting in 8,000 new outlets in Q1’22.
- Launched new SKUs in the starch and fertilizer business segments and commenced operation of fertilizer blending plant in Kaduna with a 90 tones per hour capacity.
- Gross profit reached N33.2 billion in Q1’22, up from N25.7billion in Q1’21.
- Honeywell Flour Mills Plc (HFMP) acquisition was completed in May 2022 and the transitional process resulted in an N-1.1bn deficit for HFMP and N0.4bn one-off transactional cost for FMN. Earnings before tax growth net of transitional costs would have been 15% compared to the previous year.
- The Group is very comfortable with the Honeywell investment, and the long-term projections are very positive after having managed the operations since the middle of May.
- Flour Mills of Nigeria Plc remained committed to maintaining growth and sustaining profitability by increasing local content with further backward integration investments.
Consistently good operating performance (despite increase in input prices) in the food segment and continued solid performance in the Agro-allied segment following continuous penetration into new and rural market. Investment in route to customer redistribution and improved customer interface engagement resulted in N7.3bn Profit Before Tax up by 1% on an absolute basis and 15% on an operational basis when excluding the transitional costs.
Our sugar segment saw a 64% 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% revenue growth, driven by investments in logistics infrastructure and farmer training extension services across the country.
Commenting on the result, Omoboyede Olusanya, the Group Managing Director, 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 optimization, content localization, and cost optimization across our business segments has helped to cushion the sharp rise in the cost of raw materials. We would always be committed to our purpose of Feeding the Nation, Everyday through our offerings of quality products and services”.
The Group is dedicated to achieving sector strategic growth opportunities, both organic and inorganic with keen determination as we continue to create value for our shareholders.”
UMOLU, JOSEPH A. O.
COMPANY SECRETARY / DIRECTOR, LEGAL SERVICES