Due to rising input and finance costs, Flour Mills Nigeria Plc (FMN) reported its lowest profit margin in eight years, dropping to 0.90% in the nine-month period ending December 2022.
This information was disclosed in the data obtained from Flour Mills Nigeria (FMN) Plc’s nine-month financial statements for the period ending December 2022.
According to Ratecaptain’s findings, the firm’s profit margin declined to 0.90 percent in the nine-month period of 2022, 117 basis points lower than the 2.07 percent reported in the corresponding period of 2021, while profit after tax deductions was down by 41.29 percent to N10.01 billion in the ninth month of 2022 from N17.05 billion in the ninth month of 2021.
Despite a revenue increase of 35% to N1.11 trillion in the nine-month period of 2022, the company reported a 41.29% decrease in profit after tax deductions to N10.01 billion.
The food revenue-generating segment accounted for 65% of the company’s total revenue, growing by 35.5% to N724 billion, while the agro-allied revenue-generating segment increased by 38.88% to N218 billion.
The cost of sales grew by 35.7% to N1.01 trillion, while the finance costs spiked by 133% to N37.5 billion. Total assets and shareholder’s equity rose by 38.24% and 7.28%, respectively. The total cash generated from operating activities was N36.1 billion, an increase from N28.89 billion in the same period of 2022.
The company increased its liquidity by 472.56% to N39.85 billion but reported a decrease in earnings per share to N287 per share in the 9-month period of 2023 from N400 per share in the same period of 2022.
It is believed that the drop in profit margins for FMN is a reflection of the challenges facing businesses in Nigeria. Rising input costs, such as labor, raw materials, and fuel prices, have put pressure on companies to increase their revenue while keeping their expenses low
