Flour Mills Posts N298b Revenue in H1, Donates N750m for Apapa Road

By Modupe Gbadeyanka

Market leader in food and agro-allied products in Nigeria, Flour Mills Group, has continued to record significant growths, posting N298.44 billion for the six months ended September 30, 2017, an increase of 17 percent when compared with N255.30 billion of the same period last year.

In the unaudited 2017 half year results, the company recorded profit before tax of N13.48 billion as against N8.80 billion for the same period in 2016, while the profit after tax was N9.36 billion, compared to N6.46 billion for the same period in 2016.

Commenting on the result, the Group Managing Director, Mr Paul Gbededo, stated that, “Our half year results show continued growth through most segments of our businesses, especially in the food business, delivering strong top and bottom line financials in line with our objectives.

“The Group recorded growth from volume and product mix. This growth was despite what continued to be a challenging business environment.

“Overall, the business shows an impressive performance in the first half of the year. We are positive that we are on track to meet our growth targets for the remaining part of 2017/18 financial year.”

It was discovered that the food business value chain was responsible for an increase of N40 billion of the Group’s turnover.

The Chief Finance Officer (CFO) of the firm, Mr Jacques Vauthier, in his comment, said that the management of the company was confident that this sector will record even stronger performance as the year progresses.

He stated further, “To this end, we are enhancing our marketing activities to push the brand’s presence into newer outlets while strengthening present market share.”

On the part of the firm’s Head of Corporate Business Development, Mr Sadiq Usman, in the agro-allied division, the Group’s focus will remain on developing competences and improving execution capacity to backwardly integrate its core value chains; Sugar sweeteners, edible oils, feeds & proteins and cassava starches.

He further said, “The Group will leverage its significant resources and continue to build the capacity of local farmers and farming groups, who are an integral part of our strategy to develop sustainable, locally-focused supply chains.”

As part of a strategic measure to consolidate operations, create value for shareholders and enhance administrative and operating efficiencies, the company in Q2 2017, announced the completion of a merger and absorption of Golden Penny Rice Ltd, a wholly owned subsidiary, into Flour Mills of Nigeria Plc.

It is expected that the restructuring will meaningfully improve the synergies of the Group, reduce costs and improve the competitiveness of the company’s products, with the aim of advancing the profitability of the Group.

The company is in the process of issuing the first tranche of the Shelf Registered Rights Issue fund raising program. The program which was registered in 2016 is to raise up to N40 billion in equity funds.

In addition, the CFO informed that the company has started the registration of a N70 billion Medium Term Notes program to refinance debts and lower the cost of borrowing.

According to the firm, as part of effort to combat the traffic challenges posed by the difficult road conditions in Apapa that have negatively impacted business logistics and, correspondingly, its performance, and to generally aid the ease of doing business in Apapa, it is partnering with other stakeholders with a contribution of about N750 million to rehabilitate Apapa Wharf Road and manage the traffic congestion in Apapa.

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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