By Dipo Olowookere
**Pledges to Cut Operational Costs in Q4, Issue Bonds
Group Managing Director of Flour Mills of Nigeria Plc, Mr Paul Gbededo, has said the company will make efforts to reduce its operational costs so as to give more value to shareholders.
Mr Gbadedo made this pledge while reacting to the firm’s financial results for the third quarter of last year, which ended December 31, 2019.
“I am pleased with our quarter 3 results. We have recorded impressive growth in our volumes, and profit before tax increased by 23 percent.
“In line with our purpose of Feeding the Nation, Everyday, I am positive that we are on the right track as we continue to deliver sustainable value for our stakeholders,” he said.
“Going into the final quarter of the financial year, continued growth is envisaged as we continue to implement targeted strategies, invest in our branding and distribution network and reduce operational costs that will bring even more value in the long run for shareholders,” he added.
An overview of the company’s Q3 earnings showed that the closure of Nigeria’s land borders did not negatively impact of the performance.
The profit before tax increased by 23 percent to N3.7 billion in Q3, and by 9 percent to N12.3 billion YTD, while the revenue rose to N152.7 billion in Q3 from N130.9 billion in Q3 2018/19.
For the nine months ended December 31, 2019, the revenue was N423.5 billion, representing a 6 percent increase compared with same period last year, while the gross profit rose by 11 percent in Q3 and by 3 percent YTD to N47.8 billion from N46.6 billion.
Finance cost reduced to N4.3 billion, a significant drop (20 percent) versus N5.3 billion in Q3 2018/19 (21 percent year-on-year decline).
The leading integrated food business and agro-allied group, owners of the iconic food brand Golden Penny, recorded remarkable growth in its volumes from 6 percent during first HY to 8 percent in the period under review.
The agro-allied, sugar and food value chains all had impressive results this quarter, with the food business now moving towards expected projections.
Gains in the sector can be attributed to a combination of ongoing brand loyalty and refined regional strategies that are designed to increase market penetration. These strategies have been boosted by recent improvements in the domestic market as a result of gains from the boarder closure.
The management’s strategy on increasing the efficiency of its balance sheet and improving working capital continues to. yield the desired result, with finance cost recording a steady decline. The group said it plans to issue corporate bonds in Q4.
