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 positive run of the Naira against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) continued on Wednesday, June 3, with the former chalking up N3.79 or 0.28 per cent against the latter, closing at N1,357.26, in contrast to the preceding session’s N1,361.05/$1.
Similarly, the Nigerian currency gained N10.52 against the Pound Sterling in the official market during the session to close at N1,822.67/£1 compared with the previous rate of N1,833.19/£1, and appreciated against the Euro by N9.56 to N1,574.83/€1 from N1,584.39/€1.
Further, at the black market, the Naira improved its value against the greenback at midweek by N5 to trade at N1,375/$1 compared with the N1,380/$1 it was traded a day earlier, and at the GTBank FX counter, it gained N6 to sell for N1,372/$1 versus N1,378/$1.
The boost came as the country’s external reserves continued to gain momentum. A look at the updated data from the Central Bank of Nigeria (CBN) showed that foreign reserves continue to increase with two consecutive inflows in June 2026, settling at $49.876 billion as of Tuesday.
Foreign portfolio investors, exporters and non-bank corporates continue to keep the supply side strong, with the less aggressive FX interventions by the CBN at the official window in recent times helping to ease worries about capital flight.
The apex bank reported that interbank FX turnover declined to $133.731 million across 136 deals, from $169.822 million the previous day.
Meanwhile, the cryptocurrency market remained bearish due to sell-offs triggered by geopolitical uncertainties and the US stock market rally.
Cardano (ADA) dipped by 5.5 per cent to $0.2046, Binance Coin (BNB) slumped by 4.8 per cent to $627.56, Solana (SOL) shrank by 3.9 per cent to $72.99, Ethereum (ETH) depreciated by 2.9 per cent to $1,844.53, and Bitcoin (BTC) slipped by 2.7 per cent to $65,675.87.
Further, Dogecoin (DOGE) depleted by 1.4 per cent to $0.0928, Ripple (XRP) declined by 0.7 per cent to $1.21, and TRON (TRX) lost 0.4 per cent to sell at $0.3336, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) gained 0.01 each to settle at $0.9986 and $0.9997, respectively.
By Dipo Olowookere
Nigeria’s stock market further depleted by 1.44 per cent on Wednesday following panic sell-offs by investors, who are cutting down their exposure to local equities.
Business Post observed that profit-taking dominated Customs Street at midweek, with all the key sectors of the Nigerian Exchange (NGX) Limited closing in red.
The insurance space shed 2.76 per cent, the industrial goods index lost 1.55 per cent, the banking counter declined by 1.53 per cent, the consumer goods segment shrank by 0.28 per cent, and the energy sector weakened by 0.05 per cent.
As a result, the All-Share Index (ASI) contracted by 3,554.05 points to 243,132.61 points from 246,686.66 points, and the market capitalisation moderated by N2.279 trillion to N155.940 trillion from N158.219 trillion.
Lafarge Africa led the losers’ chart yesterday after it gave up 9.97 per cent to trade at N307.90, Zichis lost 9.82 per cent to close at N29.20, Learn Africa depreciated by 9.80 per cent to N11.50, John Holt crashed by 9.80 per cent to N13.80, and Consolidated Hallmark dipped by 8.84 per cent to N6.19.
On the flip side, Abbey Mortgage Bank topped the gainers’ log after it grew by 9.93 per cent to N7.75, International Energy Insurance appreciated by 9.89 per cent to N6.00, Tripple G gained 9.80 per cent to sell for N4.37, Universal Insurance expanded by 8.91 per cent to N1.10, and Royal Exchange improved by 7.14 per cent to N1.50.
A total of 17 stocks gained weight yesterday, while 43 stocks lost weight, indicating a negative market breadth index and weak investor sentiment. This has been the mood of the market since the beginning of this week.
Market participants transacted 923.0 million shares worth N42.3 billion in 69,332 deals on Wednesday, in contrast to the 718.8 million shares valued at N29.3 billion traded in 71,683 deals on Tuesday, representing a drop in the number of deals by 3.28 per cent, and a rise in the trading volume and value by 28.41 per cent and 44.37 per cent, respectively.
Sterling Holdings led the activity chart with 264.6 million units valued at N2.1 billion, Access Holdings traded 76.7 million units worth N1.8 billion, Linkage Assurance exchanged 55.1 million units for N99.2 million, VFD Group sold 35.5 million units worth N378.8 million, and Ellah Lakes transacted 33.1 million units valued at N334.3 million.
By Adedapo Adesanya
Oil prices rose around 2 per cent on Wednesday as hostilities in the Middle East erupted anew and talks between Iran and the United States showed little progress.
Brent futures grew by $1.81 or 1.89 per cent to $97.81 per barrel, and the US West Texas Intermediate (WTI) crude climbed $2.26 or 2.41 per cent to $96.02 a barrel.
According to reports, Iran launched ballistic missiles toward regional neighbours Kuwait and Bahrain, killing one person and injuring dozens, while the US forces conducted strikes on Iran’s Qeshm Island.
Iranian drones and missiles struck Kuwait International Airport overnight, causing the country to immediately suspend air traffic, activate emergency procedures, and divert flights to alternative airports.
Iran’s Revolutionary Guard said the operation was retaliation for recent US military actions and warned that regional states supporting American operations could face further consequences. Kuwait hosts major US military facilities and serves as a key logistics hub for American operations across the Middle East, but until then had largely avoided becoming a direct target.
Following the overnight attack, the United Arab Emirates (UAE) called for a united Gulf stance.
Meanwhile, President Donald Trump said Iran had agreed not to have a nuclear weapon and that Supreme Leader Ayatollah Mojtaba Khamenei was involved in negotiations. He has insisted this week that discussions remain active and said a broader agreement could emerge within days, while Iranian officials have delivered contradictory messages.
Iranian Foreign Minister Abbas Araqchi said contacts with American representatives have not been cut off, but no progress has been made in the negotiations.
The prolonged closure of the Strait of Hormuz continues to bottleneck global energy supplies, driving sustained upward pressure on oil markets.
The International Energy Agency (IEA) has warned that global oil inventories could hit critical levels ahead of peak summer demand if stock draws continue at their current pace.
Crude oil inventories in the US decreased by 8.0 million barrels during the week ending May 29, according to data from the Energy Information Administration (EIA) released on Wednesday. The EIA’s data release follows figures by the American Petroleum Institute (API) that were released a day earlier, which reported that crude oil inventories saw a draw of 6.75 million barrels in the period.
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