By Dipo Olowookere
The board of Flour Mills of Nigeria Plc is proposing to pay shareholders of the company a dividend of N2.15 per unit for its 2022 financial year, which ended on March 31, 2022. This amount is higher than the N1.65 paid in the previous accounting period, reflecting an increase in dividend payout by 30.3 per cent.
The firm, in its audited results released on Tuesday, said the year under review was profitable as the pre-tax profit jumped by 10.48 per cent to N41.1 billion from N37.2 billion, while the net profit appreciated by 8.95 per cent to N28.0 billion from N25.7 billion, with the earnings per share (EPS) at N6.26 compared with the previous year’s N6.38.
Analysis of the results revealed that in the fiscal year, Flour Mills posted an annual turnover of N1.2 trillion in contrast to the N771.6 billion achieved a year earlier and this was largely due to improvement in the earnings from the sale of goods. It also recorded a significant improvement in income from the services it rendered in the period under consideration as it accounted for N45.6 billion versus the N29.2 billion earned from the same income stream in 2021, which is mainly from support services.
From the revenue generated in FY 2022, the food business raked in N748.8 billion versus N478.3 billion last year, the agro-allied business, which involves the sale of Golden Penny Vegetable Oil, Soya Oil and Margarine products, the company generated N213.4 billion as against the N139.4 billion a year earlier, while the sugar arm of the organisation contributed N156.0 billion to the total earnings compared with the N124.6 billion in FY 2021.
However, Business Post observed that despite the 55.6 per cent increase in the gross earnings for the year, the gross profit only moved higher by 1.2 per cent to N108.1 billion from N106.8 billion.
This was largely due to the higher cost of sales as it finished the year at N1.1 trillion compared with the N664.9 billion in the previous year.
A chunk of this was the higher cost of raw and packing materials (N958.0 billion versus N583.6 billion in 2021), an increase in fuel and oil to N23.1 billion from N17.8 billion, a jump in factory repairs and maintenance to N16.1 billion from N11.8 billion and an increase in other production expenses to N12.5 billion from N8.6 billion.
A further look into the financial statements showed that Flour Mills was able to cut down its selling and distribution expenses to N11.1 billion from N12.1 billion, but the administrative costs rose to N31.8 billion from N29.1 billion, leaving the company with an operating profit of N65.5 billion in contrast to N52.2 billion in the previous accounting year.
