Flour Mills Posts Strong Q1 Results as PAT Grows 17%

By Dipo Olowookere

The strategies put in place by the board and management of Flour Mills yielded the expected results going by the first quarter performance of the company.

In the financial statements of the flour miller released on Thursday, the profit before tax improved year-on-year by 6 percent to N5.5 billion in Q1 2019 ended June 30, 2019, compared with N5.2 billion in Q1 2018 ended June 30, 2018. This was buoyed mainly by the significant improvement in Premier Feeds and robust growths recorded in Golden Fertilizer.

In the same vein, the profit after tax recorded a double-digit growth of 17 percent in the period under review, closing at N4.2 billion versus N3.6 billion in the same period of last year.

Though the revenue generated in the first three month of the firm’s financial year by one percent to N134.8 billion from N133 billion, the gross profit went down to N16.5 billion from N17.3 billion.

In Q1 2019, the company said its cost of sales rose to N118.3 billion from N115.8 billion, while the selling and distribution expenses was flat at N2 billion, with the administrative expenses marginally going up to N4.67 billion from N4.69 billion.

Though operating profit reduced in the period under review to N9.9 billion from N11.2 billion, the finance costs were trimmed to N4.6 billion from N6.2 billion, indicating a 27 percent reduction, which the management attributed to the firm’s deleveraging strategies.

Flour Mills said its performance in Q1 2019 indicated its strategy to improve operational efficiency and implementing cost control measures across its operations.

It said despite the strong economic headwinds in the country and depressed consumer demand, its sales volumes rose by 7 percent, while the gross margins remained largely in line with figures from the previous year at 12.2 percent.

While commenting on the results, the Group Managing Director of Flour Mills, Mr Paul Gbadebo, said, “The first quarter result is a good start to the year and a great reflection of the direction that the business is headed as we continue to push our strategy of operational efficiency and substainable growth.

“We envisiage even more organic growth across the food segments, with anticipated moderations in cost of sales, as global wheat prices reduce and our improved investments in aligning marketing, sales and distribution activities boost earnings and increase market gains.”