Flour Mills of Nigeria Plc reported more than 99% year on year decline in profitability in 2024, details from its audited financial statement showed.
The consumer goods company’s net profit came at N3.45 billion from N29.5 billion in the comparable year in 2023, according to food producer’s audited report for the year.
Despite the downturn, to keep with its pay-out policy, the company’s management proposed a dividend of N1.80 for the year, a significant drop from N3.22/share in 2023. Its audited figure revealed that FMN Plc earned 6 kobo per share, compare with N7.25 kobo per share it achieved in the comparable period.
Analysts attribute earnings slump to the surge in FX losses. The results showed that FMN Plc foreign currency liabilities triggered 336.6% year on year growth in FX loss, which settled at N137.46 billion in the period.
Revenue grew by 48.8% year on year to a record high of N2.29 trillion from N1.539 trillion. Its healthy top line growth was driven by significant expansion across the Food, Agro-Allied, Sugar and Support Services business segments.
This followed increase in prices of the company’s good amidst rising inflation in Nigeria. Funding costs damaged FMN Plc performance to a large extent. Nigeria’s business environment has become tight with surge in interest rate. This has forced local lenders to repriced loans.
Likewise, oversees loans create additional problem due to naira instability. FMN Plc did contend with similar issues. Its net finance costs increased markedly by 271.2% year on year. The surge was driven by steep increase of 274.7% year on year in the company finance costs in 2024.
Overall, FMN Plc pretax profit declined sharply in reaction to pressures at on costs profile, down by 90.8% year on year to N3.95 billion from N42.75 billion in 2023. However, the company’s minimum tax expense of N4.19 billion in 2024 led to a loss of N237 million in from N39.78 billion.
In the period, the company however enjoyed tax credit worth N3.78 billion, bringing company’s net profit to N3.54 billion compared with N29.50 billion 2023.
Source: Marketforces
