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By Dipo Olowookere

Despite efforts put in place by the management of Flour Mills of Nigeria Plc to improve its performance, the company suffered a 40.40 percent decline in its profit for the nine months ended December 31, 2018.

In its financial statements released yesterday, the flour miller declared a post-tax profit of N7.7 billion compared with the N12 billion achieved in the first nine months of 2017. This was as the pre-tax profit depreciated by 42.17 percent to N11.3 billion from N19.5 billion.

In the period under review, the revenue fell by 6.28 percent to N400.6 billion from N427.5 billion, which the firm attributed to the first 6 months, with the third quarter returning to top line growth.

The cost of sales, the company said, was managed this time around, closing at N354.1 billion in contrast to N371.5 billion a year earlier, while the finance costs reduced to N16.6 billion from N25.2 billion as a result of the settlement of overdraft facilities and replacement of high interest yielding loans with favourable ones.

Also, the investment income closed at N536.5 million against N465.2 million it posted 12 months ago.

However, selling and distribution expenses increased by 46.95 percent to N5.9 billion from N4 billion, while the administrative expenses rose to N14.9 billion from N13.3 billion.

The operating profit fell by 38 percent to N27.3 billion from N44.2 billion, with the earnings per share going down by 57.8 percent to N1.93k from N4.56k.

However, Flour Mills said its continued strong sales and branding building focus has ensured a further growth in market share and strengthened its market leader position within the flour market.

The company said despite the business challenges, it is optimistic that with continued effort to increase sales and marketing activities geared at boosting its top line, it should be able to sustain a good performance for the remaining period.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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