Economy
Flour Mills Grows Stronger Despite Vast Macroeconomic Challenges
By Modupe Gbadeyanka
It was a remarkable 2016/17 financial year for Flour Mills of Nigeria despite its overwhelming macroeconomic challenges, which included fallout of some global political and economic developments leading to foreign exchange volatility, business uncertainties and a significant weakening of the Naira which negatively impacted its business.
The firm stood tall in spite of the formidable challenges and the unfavourable operating environment, achieving a solid performance, majorly influenced by its resilience and managerial capabilities.
During the period, FMN Group achieved an increase in turnover which rose by an impressive 53 percent to N524 billion. The growth was driven by a combination of volume increase, enhanced operational efficiencies coupled with commensurate increases in prices of its products.
However, the Group’s financial performance was adversely affected by the impact of over 40 percent devaluation of the Naira together with the uncertainties associated with persistent foreign exchange scarcity and sharp fluctuations in rates which it successfully hedge.
Despite those external financial issues, the Group posted an After Tax Profit of N8.8 billion, a substantial improvement over the previous year.
It is important to point out that compared with the last two financial years and put in proper perspective, the performance was very impressive.
In 2014/15 the Group recorded an operational loss of N6.2 billion only made good by the profit on sale of 50 percent of its equity in UNICEM amounting to N13.9 billion which ensured a final profit before tax of N7.7 billion.
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 percent of its equity in UNICEM, giving a profit Before Tax of N11.5 billion.
“Our company was able to navigate through the difficult waters leveraging on the Strength and quality of our brand- ‘Golden Penny’. The company achieved a remarkable growth in Revenue but due to the aforementioned unfavourable external factors and conditions, it recorded a marginal decrease in the bottom line,” the firm said in a statement.
Revenue grew by 51 percent from N248 b1llion 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, our directors will be proposing to our shareholders at the forthcoming Annual General Meeting (AGM), the declaration of a total of N2.62 billion representing dividend payment of N1.00 per ordinary share of 50 kobo each consistent with payment made in 2016.
“This is in line with our resolve to maintain consistency in annual payment of dividends to our esteemed shareholders,” the statement noted.
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.
“We believe that this is the most viable and sustainable thing to do to safeguard our future and ensure the sustainability of our 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.
“As we strive to further restructure our operations, streamline our business operations to focus on core businesses, constantly monitor and manage our costs optimally, improve and re-engineer our existing product range, we will focus on innovation and develop new strategies for the market making our products more visible and available at points of sale while we continue to improve our sales, merchandising, redistribution personnel and activities, all geared at maintaining our promises in delivering sustainable gains to all stakeholders,” the firm concluded in the statement.
By Adedapo Adesanya
Market bellwethers, Central Securities Clearing System (CSCS) Plc and FrieslandCampina Wamco Nigeria Plc, lifted the NASD Over-the-Counter (OTC) Securities Exchange by 2.08 per cent on Monday, August 3.
CSCS Plc, the Nigerian securities depository company, gained N10.00 to close at N112.00 per share compared with the previous session’s N102.00 per share, and FrieslandCampina Wamco Nigeria Plc advanced by N4.71 to quote at N152.64 per unit versus last Friday’s N147.93 per unit.
As a result, the NASD Security Index (NSI) added 92.14 points to finish at 4,523.85 points compared with the preceding session’s 4,431.71 points, and the market capitalisation appreciated by N55.31 billion to N2.715 trillion from N2.659 trillion.
Business Post reports that the price of MRS Oil Plc crashed during the trading day by N12.00 to N120.00 per share from N132.00 per share, and UBN Property Plc dipped by 3 Kobo to N1.90 per unit from N1.93 per unit.
Trading data showed that the volume of securities exchanged rose by 113.1 per cent to 1.5 million units from 690,990 units, and the number of deals climbed by 19.2 per cent to 31 deals from 26 deals, while the value of securities slid by 13.1 per cent to N65.2 million from N75.0 million.
Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and CSCS Plc with 76.8 million units traded for N5.5 billion.
GNI Plc also closed the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infracredit Plc with 2.3 billion units exchanged for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
By Adedapo Adesanya
The Nigeria Revenue Service (NRS) has introduced a 1.5 per cent stamp duty on eligible virtual asset transactions, with the tax deducted directly from the cryptocurrency purchased before it is credited to the buyer’s wallet.
According to the new guidelines issued on Monday, anyone buying Bitcoin (BTC), USDT or other cryptocurrencies in Nigeria will receive fewer digital assets due to the deduction.
This requires registered crypto exchanges and other Virtual Asset Service Providers (VASPs) to withhold the levy in the digital asset being traded and remit it to the government, marking Nigeria’s most comprehensive move yet to bring cryptocurrency transactions into the country’s tax net.
Unlike traditional taxes deducted from a customer’s bank account, the 1.5 per cent charge will be taken from the cryptocurrency itself, meaning buyers will receive less Bitcoin, USDT or other tokens than they paid for.
The tax body stated that “income tax deducted at source and stamp duty shall be remitted to the service in the originating token of the transaction.”
Besides the new stamp duty, the guidelines also clarify how income tax, Value Added Tax (VAT) and other tax obligations will apply to virtual asset activities such as trading, staking, mining and other crypto-related transactions.
To illustrate the new rule, the tax authority said a buyer who pays N1 million for one Bitcoin will receive only 0.985 BTC after 0.015 BTC is deducted as stamp duty and remitted to the government. When that Bitcoin is later sold, the next buyer will also have 1.5 per cent deducted from the cryptocurrency credited to their wallet.
The NRS said the guidelines are intended to provide clarity for taxpayers, crypto exchanges, peer-to-peer (P2P) marketplace operators, financial institutions, tax consultants and all participants in Nigeria’s virtual asset ecosystem.
According to the guidelines, the 1.5 per cent duty applies to eligible virtual asset transactions facilitated through registered exchanges and other recognised intermediaries. Where a cryptocurrency is used to complete a transaction that already attracts stamp duty under the law, the applicable duty on the underlying instrument will also be payable.
For crypto users, the implication is higher transaction costs, as eligible purchases will attract the 1.5 per cent stamp duty, while VAT on exchange service fees and income tax on taxable gains may also apply, depending on the nature of the transaction.
By Adedapo Adesanya
The Naira opened the week on a positive note, as it appreciated against the US Dollar by N3.39 or 0.25 per cent in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Monday, August 3, to N1,364.83/$1 from N1,368.22/$1 last Friday.
However, it suffered a marginal decline against the Pound Sterling in the official market during the session by 10 Kobo to close at N1,837.89/£1 compared with the preceding session’s N1,837.79/£1, and lost 6 Kobo on the Euro to sell at N1,573.93/€1, in contrast to the previous trading day’s N1,573.87/€1.
At the black market segment, the Nigerian currency traded flat against the Dollar yesterday at N1,405/$1, and at the GTBank forex counter, it was unchanged at N1,374/$1.
Interbank FX transactions increased sharply as market makers’ activities raised total Dollar volume exchanged to $137.048 million, more than 132 per cent above $58.990 million in turnover at the previous close. The surge in turnover was driven by increased deals at the NFEM window. The central bank reported that deal count at the interbank FX window rose to 138 from 67 on Friday.
As for the cryptocurrency market, major tokens advanced despite ongoing uncertainty around unresolved Coldcard wallet sweeps that have drained hundreds of Bitcoin (BTC), while traders are watching whether bitcoin can hold above $63,000 through the US session. BTC rose by 1.70 per cent to $63,765.88.
Bitcoin treasury firm Strategy disclosed Monday it sold 1,638 bitcoin for about $105 million between July 27 and Aug. 2, its third sale of 2026, per an SEC filing.
Also, an attacker has moved about 1,816 bitcoins, or roughly $114 million, from more than 5,200 addresses since July 30 in a fourth wave of sweeps targeting BTC in Coldcard-generated addresses.
Cardano (ADA) appreciated by 6.7 per cent to $0.1959, Binance Coin (BNB) gained 1.5 per cent to sell for $590.82, Solana (SOL) jumped by 1.3 per cent to $73.72, TRON (TRX) soared by 0.9 per cent to $0.3286, Dogecoin (DOGE) also grew by 0.9 per cent to $0.0703, Ripple (XRP) advanced by 0.5 per cent to $1.07, and Ethereum (ETH) rose by 0.4 per cent to $1,863.33, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 apiece.
