Flour Mills Raises Investors' Expectations
The improved operational performance of Flour Mills of Nigeria Plc in recent times appears to increased investors' expectations for higher returns on their investment by the end of this financial year.
The company has just released to the stock market operators its unaudited financial results for the nine months ended December 31, 2003 that showed a turnover of N28.0 billion, as against N25.6 billion in the comparable period of 2002, while profit after tax stood at N437.1 million compared with N 124.6 million in 2002.
The Chairman, Mr. G. S. Coumantaros told the shareholders that the Flour Mill's performance was adversely affected by increases in cost of imported materials during the second half of the financial year without corresponding increases in prices of the company's products in the face of growing competition and shrinking demand.
However, he was optimistic that the operational and synergy gains that will arise from projected increases in sales volume, use of latest technology and strategic investment activities will bring about significant improvement in Flour Mills and the group's earnings in the coming years.
Apart from cost reduction, the company's quality control has moved to its ultra modern laboratory equipped with modern quality control machines like HPLC for vitamin analysis and new bakery ovens.
To achieve its future goals, the company continued to make strategic investments, in addition to upgrade, modernise, refurbish and rehabilitate production facilities, which are vital to customers who desired products of high quality.
The installation of 'M' Mill, a new ultra modern high capacity and state of the mill has commenced.
The 'M' mill augments the company's capacity to produce flour and bring significant improvement to earnings through lower unit cost since it is able to operate at higher levels of efficiency and productivity.
Also, the company made some other significant capital investments that brought amounts spent by the group on capital expenditures to N3.8 billion.
The expenditures were incurred on milling machineries, plant and equipment, generating facilities, packing machines and equippment, acquisition of additional bulk delivery trucks for flour and cement, increase in the company's fleet of trucks and other capital projects in furtherance of its refurbishment programme.
The objective is to modernise, rehabilitate and upgrade existing mills and other production facilities, utilities and infrastructures.
Its annual report and account for the financial year ended March 31, 2003 reveals a downward movement of its key performance indicators.
Its profit after tax declined by 83 per cent from N1.537 billion in 2002 to N254.995 million in 2003.
The group's results show that turnover dropped by two per cent from N43.306 billion in 2002 to N42.250 billion in 2003, while profit before tax dropped sharply by 74 per cent from N2.266 billion in 2002 to N590.232 million in 2003.
Although, the group recorded 33 per cent growth in share capital from N273.0 million to N364.0 million in 2003, the shareholders' funds dipped marginally by one per cent from N5.103 billion in 2002 to N5.067 billion in 2003.
Also in sharp decline was the group's earning per share that went down by 83 per cent from 211 kobo in 2002 to 35 kobo in 2003, while dividend per share (actual) declined by 47 per cent from 75 kobo in 2002 to 40 kobo in 2003.
The group further recorded a drop by three per cent in its workforce from 5,283 employees in 2002 to 5,138 in 2003.
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