Flour Mills of Nigeria Plc (FMN) recorded N31 billion as Operating Profit before adjustment for foreign exchange losses in its unaudited financial performance for the period Q1 2023/2024.
This is even as the financials shows strong revenue growth across its business segments despite the challenging macro environment, according to its unaudited account of Q1 2023/2024 made public yesterday.
However, Overall Profit Before Tax was impacted by N22.5 billion foreign exchange losses during the quarter, leading to a N9.3 billion loss. However, the company said, this is a temporary impact given the timing of the devaluation as of mid-June, as FMN has proven its ability to overcome the effects of FX over the years and is comfortable that it will continue to do so.
It recorded Topline growth of 34 per cent in Q1’24 over Q1’23, showing solid performance across all segments (Food, Agro-Allied, Sugar, and Support Segments by 42 per cent, 22 per cent, 21 per cent, and 10 per cent respectively), driven by volume growth and a favourable mix.
Overall gross profit, it said, grew by 51 per cent in Q1’24, at a higher rate than revenue growth.
Similarly, Net Debt of the firm improved by N31 billion in Q1’24 vs. FY’23, primarily driven by tighter inventory management, reinforcing its commitment to reducing the debt and improving the cash flow. The recent N85 billion commercial paper issued at an average rate of 11.75 per cent is foreseen to further reduce the financing costs for the balance of the year, and beyond.
While its Oil and fats business in the agro Allied segment launched a new product, the Golden Penny Choco Spread with different SKUs confirmed its commitment to product innovation and penetration into new markets.
According to the firm, “this quarter is marked by strong growth in revenue with Gross profits growing ahead of revenue whilst operating profit fell due to FX exchange losses of N22.5bn during the Quarter. The quarter in the review also depicts an increased operational efficiency with accelerated plans for cost optimisations across the Group to ensure competitive product offerings and profitability in the new operating environment.”
Commenting on the result, the Group managing director, Omoboyede Olusanya, said: “As a Group, our commitment to ensuring consistent development of local content and capacities is unwavering, and as we churn out content of superior quality, it is of great importance to us today and in the future that we also continue to drive value for our shareholders,” he stressed.
He added that, “we fully understand the consequences of market volatility especially as it relates to our business environment across various focus areas; thus, we are building the business with so much fluidity so that it can withstand both emerging and existing environmental challenges as we continue to feed and enrich lives, everyday.”
