Flour Mills of Nigeria gains on disposal of investment in an associate have helped catapult net income as the largest miller in Nigeria continues to embark on aggressive expansion with a view to consolidating its position in the market.
For the six month ended September 30 2015, Flour Mills’ net income surged by 450.68 percent to N24.01 billion, from N4.36 billion last year.
Sales moved by 7.27 percent to N177.58 billion as the company continues to add new product lines to boost top line.
BusinessDay calculations show the company’s profit got a tremendous boost from gain on the sale of investment in associates of N23.23 billion in the period under review.
Industry analysts say the company’s top line may have got a boost from new product lines and projects in the pipe lines.
Flour Mills recently launched new product lines such as Kool2Go instant powdered milk and Golden penny multipurpose flour to boost the top-line.
The Nigeria miller has commissioned state of the act facilities such as (Thai Farms in Ogun), On-going Sugar project and mill projected to produce 100,000 metric tons of sugar annually as well as 10MW of electricity in line with the National sugar Master Plan should suggest stronger performance in the future.
Inflation in Nigeria, where the World Bank estimates almost 35 percent of the population lives in poverty, accelerated to 9.4 percent in September from 9.3 percent a month earlier, data from the nation’s statistics bureau show.
Flour Mills interest expense increased by 21.11 percent to N12.33 billion in 2015 compared with N10.18 billion last year.
Flour Mills cost of sales increased by 7.63 percent on the back of currency risk caused by devaluation of local currency that spiral up imported raw materials.
Despite rising cost margins, the Nigeria miller profit margins were impressive as gross profit jumped by 4.23 percent while net margin, a measure of profitability and efficiency increased to 13.52 percent in 2015 as against 2.60 percent the previous year.
Flour Mills share price closed at N22 on the floor of the exchange while market capitalization was N57.73 billion.
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