Among the high points of Flour Mills Nigeria (FMN) Plc full year result is the skillful rework of its financial structure to the effect of replacing costly short-term facilities. This deft financial engineering pretty much sums up the totality of the conglomerate’s activities for the year as one of innovation.
It is the innovative quest that drove FMN, in the year under review, to issue 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. A direct result of this is the drop in finance cost. Net finance cost fell from N17.5 billion to N15 billion.
Financial structure, according to Wikipedia, refers to the mix of debt and equity that a company uses to finance its operations. This composition directly affects the risk and value of the associated business.
The direct effect of FMN’s quest for the perfect mix is significantly improved bottom line despite a year partly encumbered by a recession. Specifically, FMN posted 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 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, underlining its consistency as one of the most reliable companies when it comes to consistency in dividend payment. This attribute has also over the years made the company an investor’s delight and a bellwether company.
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 agricultural value chains towards helping the nation attain the most sought after self-sufficiency in food. We do not doubt this, given the company’s new product offering, outgrower scheme expansion and efforts at geographical presence.
The year in review marked a strategically improved market/brand awareness of the Group’s range of affordable and high nutrition-based food products; an acceleration in B2C segments with the introduction of new product offerings such as Auntie B Spaghetti Slim and Spaghetti, as well as the introduction of new stock-keeping units (SKUs) in key categories, along with investments in regional distribution.
Commenting on the result, Mr. Omoboyede Olusanya, the Group Managing Director, 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.”
On sustainability reporting, the Group made history as the first agro-allied company in Nigeria to outline and present a sustainability report to the Nigerian Exchange Group (NGX).
The company’s subsidiary, Golden Sugar has increased its investment in sugar self-sufficiency and was recently Awarded ISO 50001 For Energy Management. Golden Sugar Company, the most productive in the Federal Government’s backward integration on sugar, was awarded the ISO 50001 Energy management systems certification by the International Organization for Standardization (ISO). This will lead to further cost-cutting efficiency in sugar production.
ISO 50001 Energy management systems originally released by ISO in June 2011, is an international standard created by the International Organization for Standardization (ISO), which specifies the requirements for establishing, implementing, maintaining and improving an energy management system.
Companies that adopt ISO 50001 do not only yield benefits from the energy savings but also showcase environmental responsibility to corporate customers in line with the UN sustainability goals.
In one of the most challenging years in recent history, the FMN Group activated a comprehensive response and mobilized considerable resources including a resilient global supply-chain to help the Federal Government manage the impact of the COVID-19 pandemic on the Nation. These include, expanding Nigeria’s testing Capacity with 60,000 COVID-19 test kits; supporting 10,000 Nigerian Healthcare workers in 15 states with $1.5 Million medical supplies procurement; supporting vulnerable communities in 12 States with a NGN 400 Million food donation program; contributing an additional NGN 1 billion to the CBN led Nigerian Private Sector Coalition against COVID-19; CaCOVID.
Additionally, FMN Group has been enriching lives and empowering communities through its CSR and socio-economic activities, resulting in one of the most harmonious and impactful relationship with the Group’s host communities, and indeed an endearing model for corporate emulation.