• Revenues: N1.697 trillion, +76% YoY  
  • Cost of sales: N1.536 trillion, +79% YoY  
  • Gross Profit: N161.09 billion, +53% YoY  
  • Selling and distribution expenses: N28.78 billion, +145% YoY  
  • Administrative expenses: N36.37 billion, +44% YoY  
  • Operating Profit: N105.94 billion, +40% YoY  
  • Foreign Exchange Losses: N46.54 billion, -9% YoY  
  • Finance cost: N43.96 billion, +27% YoY  
  • Profit Before Tax (PBT): N19.75 billion, +342% YoY  
  • Tax expense: N5.33 billion, +2075% YoY  
  • Profit for the period: N14.41 billion, +271% YoY  
  • Earnings Per Share (EPS): 447 kobo, +284% YoY  

Flour Mills of Nigeria Plc, a leading agribusiness company, achieved a notable financial milestone by reporting a pre-tax profit of N19.7 billion for the six-month period ending September 30, 2024. This remarkable turnaround signifies a positive trajectory for the company, marking a departure from previous financial challenges.

The information is sourced from the company's unaudited financial results for the second quarter of the fiscal year 2024/2025, which concluded in September 2024.

During this period, the company experienced a notable improvement compared to the same timeframe in 2023/2024, when it recorded a pre-tax loss of N8.13 billion.

In the reviewed period, Flour Mills achieved revenues of N1.69 trillion, a substantial increase from N964.6 billion in the corresponding period of 2023. However, the cost of sales accounted for approximately 90% of the revenues, totaling N1.53 trillion.

The 79% rise in cost of sales, which closely matched revenue growth, led to a compression in gross profit margins, with gross profit increasing by only 53% to N161.09 billion. This margin pressure indicates that escalating production or input costs pose a significant challenge, hindering the ability to convert revenue growth into gross profit effectively.

The company's performance in the full year of 2023 is noteworthy, with revenues totaling N2.29 trillion; however, profit after tax was only N3.54 billion, as the cost of sales reached N2.02 trillion. During the review period, Flour Mills experienced a nearly 100% surge in raw material costs, escalating from N786.5 billion in the same timeframe last year to N1.419 trillion. Additionally, there was a marked rise in direct staff expenses, likely due to an increase in the minimum wage.

The company faced additional challenges from foreign exchange losses and finance costs. Although foreign exchange losses decreased slightly by 9%, they remained substantial at N46.54 billion, likely due to currency fluctuations. Finance costs increased by 27%, indicating higher borrowing expenses or an increased debt burden.

Energy expenses more than doubled during this period, with power costs rising from N21.95 billion in the previous year to N46.79 billion. The food segment emerged as the largest revenue contributor, generating N1.14 trillion, followed by the sugar segment with N274.17 billion and the agro-allied segment, which brought in N251 billion during the same period.