Flour Mills of Nigeria (FMN) recorded gross profit of N33.2 billion in the first quarter of 2022 (Q1’22), compared to N25.7 billion recorded in the first quarter of 2021.
In its unaudited financial statements for the first quarter of 2022 published on Friday, the Group recorded revenue growth of 45% in Q1’22 compared to Q1’21, which showed strong performance in all segments. (Food, Agri-Allied, Sugar and Support segments), supported by volume growth and a favorable mix.
According to the Group’s financial statements, other factors that have contributed to its strong performance include increased penetration in new and rural markets, for example, the growth of breakfast cereals in Eastern States and Abuja. , and the implementation of innovative marketing strategies to serve rural markets. .
Others continue to focus on investments in the consumer redistribution path, resulting in 8,000 new outlets in Q1’22; launched new SKUs in the starch and fertilizer business segments and commissioned a fertilizer blending plant in Kaduna with a capacity of 90 tonnes per hour.
The Group also completed the acquisition of Honeywell Flour Mills plc (HFMP) in May 2022 as part of a transition process which resulted in a shortfall of N1.1 billion for HFMP and a one-time transaction cost of 0 .4 billion naira for FMN.
He said growth in pre-tax profit, net of transition costs, would have been 15% from a year earlier.
Regarding the acquisition, the group said it was “very comfortable with the investment of Honeywell, and the long-term projections are very positive after managing the operations since mid-May”, said he said, adding that the group “remains committed”. to sustain growth and sustain profitability by increasing local content with new upstream integration investments.
In reviewing its operations, the Group noted that the quarter saw “consistently good operating performance (despite increased input prices) in the food segment and continued solid performance in the agro-allied segment following to continued penetration into new and rural markets.
“Investment in the road to customer redistribution and improved customer interface engagement resulted in a 1% increase in pre-tax profit of N7.3 billion on an absolute basis and N15 % on an operational basis excluding transition costs.
“Our sugar segment recorded 64% sales with stabilized business environments and strong demand for brown sugar which is produced locally at our Sunti farm. Our animal feed business saw revenue growth of 21%, driven by investments in logistics infrastructure and farmer training extension services across the country. »
Commenting on the result, Group Chief Executive Omoboyede Olusanya said, “Despite the challenging socio-economic environment, we continue to deliver strong business performance with resilience and operational excellence.
“Our increased operational efficiency with accelerated plans to optimize our supply chain, localize content and optimize costs across our business segments helped to cushion the sharp rise in raw material costs. We would always be committed to our goal of feeding the nation, every day through our quality product and service offerings.
“The Group is dedicated to realizing strategic industry growth opportunities, both organic and inorganic, with great determination as we continue to create value for our shareholders.
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