Flour Mills’ Investment in Agro-Allied Boost HY’20 Profit by 68%

By Dipo Olowookere

The decision by the management of Flour Mills of Nigeria Plc to invest heavily in its agro-allied segment has yielded positive results as reflected in the half-year earnings of the company.

The leading integrated food business and agro-allied group today released its financial statements for HY 2020 ended September 30 and from the analysis, the owners of the iconic Golden Penny brand achieved a strong performance.

For example, the revenue grew by 31 per cent year-on-year in the period to N355.1 billion from N270.8 billion despite the prevailing economic headwinds.

In the period under review, Business Post observed that the cost of sales rose to N304.8 billion from N239.0 billion while the gross profits jumped to N50.3 billion from N31.8 billion.

The selling and distribution costs slightly dropped to N4.4 billion from N4.5 billion, while the administrative costs skyrocketed to N13.0 billion from N10.5 billion, with the operating profit at N23.7 billion versus N16.8 billion.

The finance income was N826.0 million as against N651.7 million in the corresponding period of last year, while the finance costs rose to 10.0 billion from N8.8 billion.

In the results, Flour Mills declared a profit before tax of N14.6 billion compared with N8.6 billion in the same period of last year and this, according to the firm, was largely driven by the agro-allied segment, which generated a profit of N6.3 billion compared to a loss the previous year.

The agro-allied segment saw very strong improvement in the edible oils and fats, protein and fertilizer businesses following the investments over the last few years. For the profit after tax, it ended at N9.9 billion in contrast to N5.9 billion in the same period of last year.

“With this result, our business has once again shown its resilience by following the path of sustainable growth despite the prevailing challenges in both the local and global economy,” the Group Managing Director of Flour Mills, Mr Paul Gbadedo, stated.

He further assured that “in line with our vision to continue to grow value for our investors, management will for the remaining part of the financial year continue to concentrate on improving operational effectiveness through accelerated strategies for the group-wide cost optimisation, which will ensure sustainability in the current market climate, while we continue to invest in growing the business further.”