Flour Mills profit drops by 85.71%

Flour Mills of Nigeria Plc has reported an 85.71 per cent decline in the profit of its parent company.



The financial statement for the six months to September 2018, which was made available to the Nigerian Stock Exchange, showed that the group’s profit after tax, which stood at N5.04bn, dropped from N9.35bn in the same period in 2017.



The firm, in a statement on Friday, said the reduction in profit was as a result of a drop in sales volume precipitated by the persistent traffic challenges in Apapa.



The Group Managing Director, Flour Mills of Nigeria, Mr Paul Gbededo, said, “Operations in Apapa continues to suffer major setbacks in traffic and logistics challenges, impacting in a marginal drop in our volume and top line activities.”



He added that the group, however, increased its market share in some product categories in a somewhat challenging environment with lower consumer spending.



According to the report, the group recorded a 49 per cent increase in selling and distribution expenses to N4.13bn in the six months to September 2018 from N2.77bn during the same period in 2017.



The report said the group recorded a six per cent growth in investment income of N290m, as against the N270m recorded in the same period of 2017.



It said the growth was as a result of short-term investments.



The group recorded a 31 per cent drop in its finance cost from N16.27bn in the second quarter of 2017 to N11.23bn in Q2 2018 as a result of the settlement of overdraft facilities and replacement of high interest- yielding loan facilities with cheaper loan facilities.



Gbededo said, “In the face of persistent economic challenges and a difficult operating terrain, we continue to pursue our growth strategy to gain market share in all key product segments.



“With improved marketing and promotional activities for most of the key food businesses, we envisage new gains in the remaining part of the year, as we continue to focus on innovative products that deliver on great consumer experience.”
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