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
The NASD Over-the-Counter (OTC) Securities Exchange extended its stay in the south territory with a decline of 0.56 per cent on Wednesday, April 2.
This brought down the market capitalisation by N13 billion to N2.417 trillion from N2.430 trillion, and downed the NASD Unlisted Security Index (NSI) by 22.57 points to 4,062.87 points from the previous session’s 4,062.87 points.
It was observed that the NASD exchange ended with three price gainers and three price losers during the trading day.
MRS Oil Plc depreciated by N19.00 to close at N171.00 per unit compared with the previous price of N190.00 per unit, NASD Plc lost N4.14 to trade at N37.36 per share compared with Wednesday’s N41.50 per share, and Central Securities Clearing System (CSCS) Plc gave up N2.00 to sell at N78.00 per unit versus N80.00 per unit.
On the flip side, FrieslandCampina Wamco Nigeria Plc appreciated by 19 Kobo to N93.00 per share from N92.81 per share, Food Concepts Plc expanded by 15 Kobo to N2.87 per unit from N2.72 per unit, and Great Nigeria Insurance (GNI) Plc improved by 2 Kobo to 52 Kobo per share from 50 Kobo per share.
Yesterday, the volume of securities dipped by 91.8 per cent to 260.2 million units from 3.2 billion units, the value of securities went down by 98.1 per cent to N154.2 million from N8.3 billion, while the number of deals soared by 53.3 per cent to 46 deals from 30 deals.
GNI Plc was the most active stock by value on a year-to-date basis with 3.4 billion units worth N8.4 billion, followed by CSCS Plc with 56.9 million units valued at N3.9 billion, and Okitipupa Plc with 27.5 million units traded for N1.8 billion.
The most traded stock by volume on a year-to-date basis was also GNI Plc with 3.4 billion units sold for N8.2 billion, trailed by Resourcery Plc with 1.1 billion units exchanged for N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units transacted for N1.2 billion.
By Adedapo Adesanya
The Naira dropped N2.09 or 0.15 per cent against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Thursday, April 2, to trade at N1,380.79/$1 compared with Wednesday’s rate of N1,378.70/$1.
However, it appreciated against the Pound Sterling in the official market by N2.77 to quote at N1,824.86/£1 versus the N1,836.57/£1 it was traded at midweek, and improved its value against the Euro by N10.54 to N1,591.92/€1 from N1,602.46/€1.
Yesterday was the last trading session of the week for the local currency in the spot market, as the market will be closed on Friday and Monday for the Easter Holiday.
At the black market, the Nigerian Naira maintained stability against the greenback yesterday at N1,405/$1, but gained N8 at the GTBank FX counter to settle at N1,388/$1, in contrast to the previous session’s N1,396/$1.
Pressure eased on the domestic currency as strong policy indicators have helped calm the majority of worries within the financial systems. Particularly in the remittance segment, the apex bank has directed all International Money Transfer Operators (IMTOs) to route remittance transactions through designated Naira settlement accounts in banks, a move aimed at boosting transparency and channelling more foreign exchange into the formal market.
This helps take off pressure from the foreign reserves, which have fallen below the $50 billion mark as they are gradually decreasing rather than falling sharply.
Meanwhile, the cryptocurrency market was bullish on Thursday, as macro sentiment shifted against recent optimism after reports that Iran is drafting a protocol with Oman to manage traffic through the Strait of Hormuz, easing concerns about disruptions to a key global oil route.
The remarks came after U.S. President Trump on Wednesday night vowed to hit Iran “extremely hard” in the coming weeks and that the Strait of Hormuz would “open naturally” once the war ends.
Cardano (ADA) chalked up 1.9 per cent to trade at $0.2435, Dogecoin (DOGE) grew by 1.2 per cent to $0.0912, Ethereum (ETH) appreciated by 0.8 per cent to $2,066.37, Bitcoin (BTC) added 0.5 per cent to sell at $67,080.53, Solana (SOL) increased by 0.5 per cent to $79.91, and Ripple (XRP) jumped 0.2 per cent to $1.31.
Conversely, Binance Coin (BNB) dipped 0.7 per cent to $586.90, and TRON (TRX) depreciated by 0.3 per cent to $0.3147, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.
By Dipo Olowookere
The local stock market was relatively flat on Friday, as the bears and the bulls shared the spoils of war, though investor sentiment turned bullish compared with the preceding session’s bearish posture.
Data from the Nigerian Exchange (NGX) Limited showed that the All-Share Index (ASI) was marginally down by 4.66 points as it ended at 201,698.89 points versus Wednesday’s 201,703.55 points, and the market capitalisation slightly contracted by N3 billion to N129.806 trillion from N129.809 trillion.
Customs Street was shut on Friday because of the public holidays declared by the federal government today and next Monday.
Business Post reports that John Holt declined by 9.91 per cent to N15.45, Abbey Mortgage Bank shed 9.60 per cent to trade at N8.95, International Energy Insurance slipped by 6.48 per cent to N3.32, Chams shrank by 5.30 per cent to N3.75, and Tantalizers depreciated by 5.18 per cent to N4.03.
On the flip side, Unilever Nigeria improved by 10.00 per cent to N103.40, Fortis Global Insurance gained 9.82 per cent to trade at N1.23, Multiverse appreciated 9.81 per cent to N20.15, Legend Internet advanced by 9.38 per cent to N6.30, and Zichis grew by 9.02 per cent to N14.14.
The market breadth index was positive during the trading session, as there were 35 appreciating stocks and 24 depreciating stocks.
Yesterday, investors traded 560.0 million equities valued at N19.3 billion in 49,676 deals, in contrast to the 815.5 million equities worth N33.3 billion transacted in 52,641 deals in the preceding day, representing a drop in the trading volume, value, and number of deals by 31.33 per cent, 42.04 per cent, and 5.63 per cent, respectively.
Secure Electronic Technology dominated the activity log with 59.7 million shares valued at N61.1 million, Wema Bank exchanged 52.0 million equities worth N1.4 billion, VFD Group transacted 36.0 million stocks for N410.5 million, Access Holdings sold 35.3 million shares valued at N914.8 million, and Chams traded 31.0 million equities worth N115.0 million.
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