‘How backward integration aided value creation, despite pandemic’

By championing backward integration programmes to expand value delivery across all value chains, including strategic partnerships with smallholder farmers, the Flour Mills of Nigeria Plc (FMN), has stated that it was able to record an average revenue gain of 34 per cent across all business sectors.

Indeed, its audited financial result for the year ended 31st March 2021, showed an innovation-driven revenue performance underlined by an accelerated fourth quarter growth against the same period of preceding year.

The Group achieved topline growth for the year, aided by gains from its agro-allied turnaround strategy.

Specifically, FMN posted a revenue of N771.6 billion for the year, showing an increase of 34.5 per cent compared with the N573.77 billion recorded the previous year. Net finance cost fell from N17.5 billion to N15 billion, resulting from better cost and financial management strategy.

Profit before tax rose by 112 per cent to N37.19 billion from N17.50 billion, while profit after tax (PAT) grew faster by 126 per cent to print at N25.72 billion compared with N11.38 billion the preceding year.

Based on the performance, the board has proposed a dividend of 165 kobo per share up from 140 kobo per share last year. The company’s food business also recorded exponential organic growth, driven by constant product innovation and transformation in new markets, as well as operational efficiency through route-to-market investments in digitisation and rapid expansion in the B2C sectors.

In the year under review, FMN Successfully issued N30 billion in corporate notes with tenors of 5 and 7 years at 5.50 percent and 6.25 percent, respectively, to strategically replace costly short-term facilities.

Highlights of the past year business performance by Flour Mills of Nigeria include a strong performance and show of resilience in a challenging year to capture first signs of economic recovery with accelerated Q4 growth vs last year (Q4’21 vs Q4’20) demonstrated in +44% Revenue; +158% earnings before tax (EBT) and profit after tax (PAT) of +211%.

The Group further delivered impressive full year top-line growth across all business segments with an average revenue growth of 34 per cent. Profit After Tax reached N25.7 billion, up from N11.4 billion in 2019/2020 (127% YoY Growth).

The leadership of the company pledged to maintain a consistent focus on strong discipline in operational and capital efficiency by increasing local content in group-wide supply chains and sustain its commitment to backward integration programs across all value chains.

Commenting on the result, the Group Managing Director, Mr. Omoboyede Olusanya, said: “Flour Mills emerges from the prevailing COVID-19 environment as a stronger, more resilient, flexible, and confident business as a result of the collective strategic actions made over our 60-year history. I want to thank all our employees for their patience and hard work as we consistently adapted to the year’s challenges and invested significantly in our purpose of feeding the nation every day.”

“FMN is now harvesting the fruits of these efforts and remains committed to braving a continuously uncertain environment with cautious optimism, innovation, portfolio advancement and other strategies outlined in our recent sustainability report.”