Flour Mills Raises Dividend Payout by 17% as Profit Jumps 185%

flour mills

By Dipo Olowookere

Shareholders of Flour Mills of Nigeria Plc will receive a higher dividend this year than they got from the company last year.

This is because the board of the flour miller has increased the dividend payout for the 2019 financial year by about 17 per cent.

On Monday, August 3, 2020, the firm released its financial statements for the year and from the analysis by Business Post, the shareholders will get a cash reward of N1.40 for each of their company’s stocks in their portfolio. For the 2018 fiscal year, investors were paid N1.20 per unit.

In a notice today, Flour Mills said it will pay the dividend to shareholders on Monday, September 14, 2020, directly to their bank account.

However, the beneficiaries will only be those whose names appear on the register of members as at the close of business on Friday, August 14, 2020, while the register will be closed from Monday, August 17 to Friday, August 21, 2020.

Business Post observed from the financial status of Flour Mills that it had a fruitful 2019 as the revenue grew to N573.8 billion from N527.4 billion despite the hard operating environment, which prevented the company to export some of its products through the land borders to neighbouring countries.

The increase in the turnover was only boosted by the higher local demand for the company’s flour, pasta, snacks and noodles, contributing N358.4 billion to the total turnover compared with the previous year’s N335.6 billion, while the sale of agro-allied products and sugar accounted for N105.5 billion (versus N88.1 billion in FY’19) and N97.6 billion (versus N82.7 billion in FY’19) respectively.

According to the firm, revenue from customers domiciled in Nigeria amounted to N569.4 billion (2019: N520.2 billion), while revenue from foreign customers (export revenue) amounted to N4.3 billion (2019: N7.2 billion.

It further said one of its major customers from the food segments represented approximately N12 billion (2019: N15 billion) of the group’s total turnover.

In the year, the cost of sales jumped to N508.0 billion from N474.1 billion in 2019 as a result of the higher cost of raw and packaging materials and production employee costs.

During the period, the gross profit increased to N65.8 billion from N53.4 billion, while the net operating gains dropped to N4.9 billion from N6.2 billion despite an increase in fair value gain on derivatives, government grants, insurance claim and rental income.

The net operating gains were impacted negatively by loss on exchange differences loss on disposal of property, plant and equipment as well as sundry loss.

Furthermore, the selling and distribution costs rose to N9.3 billion from N8.2 billion, while the administrative expense jumped to N23.4 billion from N19.4 billion, leaving the operating profit at N35.1 billion as against N32.3 billion in FY 2019.

In the period under consideration, the investment income of Flour Mills rose significantly to N2.4 billion from N768.6 million, while the finance costs went down to N20.0 billion from N22.9 billion.

The profit before tax appreciated to N17.5 billion from N10.2 billion, while the net profit astronomically jumped by 185 per cent to N11.4 billion from N4.0 billion.

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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