By Michael Eboh
Following the negative impact of the global economic crisis on its bottom lines in its 2009 financial year, Flour Mills of Nigeria Plc has announced its decision to increase its investment in strategic areas of the business, as parts of plans towards positioning to tackle the challenges in the years ahead.
The company had in its financial statement for its year ended March 31, 2009, recorded a 45 per cent drop in its profit before tax and a 39 per cent drop in its profit after tax, due to an exceptional foreign exchange loss of N6.2 billion, brought about the devaluation of the countryâ€™s currency.
Speaking at a forum, heralding its forthcoming annual general meeting in Lagos, last week, the Managing Director of the company, Chief Emmanuel Ukpabi disclosed that it has taken appropriate steps to cushion the effect of any future devaluation of the countryâ€™s currency and plans to increase its investment in power generation, storage facilities, packaging among others.
He said, â€œThe Groupâ€™s financial performance was adversely affected by the impact of a major and dramatic devaluation of the Naira in December 2008. Flour Mills sustained a foreign exchange loss of N6.2 billion in respect of its exposure to trade finance lines. In addition, mour subsidiary recorded a loss of about N246 million in respect of a foreign currency denominated facility.â€
He blamed the loss for the drop in its key financial indices and also for its low dividends payout to its shareholders in the year under review.
The companyâ€™s turnover stood at N180.07 billion, rising by 41 per cent from N127.66 billion in its 2008 financial year, it posted a profit before tax and exceptional item of N11.92 billion, from N9.88 billion recorded in 2008 and an exceptional item of N6.45 billion.
It profit before tax, however, dipped by 45 per cent, from N9.88 billion in 2008 to N5.47 billion in the year under review, while its profit after tax also dropped by 39 per cent, from N6.36 billion in 2008 to N3.89 billion in the year under review.
The company is proposing a dividend of N854.19 million, representing a 45 per cent drop from a dividend of N1.55 billion. To this end, it is declaring a dividend per share of 50 kobo to be paid to its shareholders, pending its approval at the forthcoming annual general meeting. This represents a drop of 50 per cent from a dividend of N1 per share declared in 2008.
Ukpabi disclosed that despite the lull in economic activities brought about by the financial crisis, the company is still in a better position to tackle the challenges brought about by the crisis, as evident in its increased productivity and efficiency.
We have established strong foundation for the sustainable future growth of our core business of flour milling through modernising, replacing or remolding all our aged mills. The benefits are becoming visible in terms of increased productivity and efficiency.
â€œWe continue to invest in power generation, storage facilities, capacity to pack and deliver increased volume of products rapidly and most importantly, in human capital and skills,â€ he noted.