Flour Mills of Nigeria reports N9.33bn loss, foreign exchange loss of N22.5bn

Flour Mills of Nigeria (FMN) recorded loss after tax in the period ended June 2023 and also lost millions to penalty during the same period, the firm’s financial statement showed.

In its Q1 2023 financial statements released on Wednesday, Flour Mills of Nigeria reported N9.33 billion loss, failing to improve on the N5.49 billion profit after tax recorded in the quarter ending June.

Also, FMN operating profit dropped to N7.11 billion between April to June this year, failing to surpass the N15.28 billion posted in the same period in 2022.

The decline in the company’s operating profit was due to the naira devaluation, which resulted in the firm suffering a foreign exchange loss of N22.5 billion, with the ripple effect including the loss after tax.

“Management remains optimistic that with the current government monetary policies at stabilising the FOREX market, and management continues effort in sales and marketing activities geared towards boosting our top line while keeping cost under control, we expect to see significant improvement in profit generation in the coming period,” a statement by FMN disclosed.

The loss followed an increase in the company’s revenue, which rose to N456,37 billion in the review period, compared to the corresponding quarter of 2022 when it generated N339.60 billion.

Although much of the turnover was gulped by the cost of sales, as expenses on raw material, fuel, factory operation amongst others rose from N306.35 billion in the review period to N406.08 billion in Q1 2023.

During the period in review, Flour Mills of Nigeria was also fined N149.39 million. Note that in the same quarter last year, the firm was fined N154.88 million.

However, in the full year of 2022, Ripples Nigeria learnt that Flour Mills of Nigeria was fined a total of N617.04 million, compared to N2,30 billion in 2021.

Meanwhile, in full year 2022, FMN recorded N29.50 billion profit after tax, in contrast to the N28.01 billion reported in the corresponding year of 2021.

The PAT increased the same year the company’s turnover increased to N1.53 trillion, against the N1.16 trillion revenue generated in 2021.