Flour Mills of Nigeria Plc Re: Explanatory Notes for Significant Variation on the Income Statement
Category: Investors NewsBeat
July 16, 2012
The Company has forwarded to The Exchange a summary of explanatory notes relating to its Group and Company’s results for the year ended 31st March, 2012 to assist with better appreciation and understanding of the financial statements.
1.Turnover: Turnover of Flour Mills of Nigeria Plc (FMN) increased by 13% from N161.8 billion to N183.4 billion primarily due to good performance in its core food business whose revenues have increased following the merger of Golden Pasta Company Limited (GPC) with FMN.
Fertilizer sales and margin were lower than the preceding year due to a reduction in demand from Government as a result of old stocks in warehouses.
Cement volume was down due to Government actions.
In addition, input cost of flour increased over prior year due to Naira devaluation, higher wheat costs, increased cassava flour wage and vitamins/additives. However, there was a delay effect regarding flour price increase announced in May 2011.
2. Distribution and selling 1,342,839 626,643
Includes GPC’s figure of N545.6 million for the year ended 31st March 2012. The comparative figure was separately reported By GPC last year. Furthermore, the company invested heavily on Advertising and campaigns to further strength its brand, the impact of which has started to materialize?
3. Administrative Expenses 6,064,383 4,853,676
Current year’s figure includes GPC’s administrative Expenses of N430 million. The comparative figure was separately reported by GPC last year.
In addition, there was a modest increase in expenditure relating to Corporate Social Responsibility.
4. Interest Payable and Similar Charges 5,570,280 4,853,676
The 21% increase was basically due to interest payment On N37.5 billion FMN Corporate Bond of December, 2010. Interest charged during the year ended 31st March was N3.1 Billion as against N1.4 billion in March 2011.
Investment in sugar and other strategic growth oriented projects Increased interest expenses.
1. Amount payable N3, 735,643,000 was same as last year. However, due to the increase of capital base as a result of the Rights issue of December, 2011, FMN dividend per share for 2012 Was calculated on the enlarged share capital.
2. In view of the various on-going strategic capital projects to grow the Company’s business, the Board took a prudent decision by recommending A dividend of 160 kobo per ordinary share of 50 kobo each in Order to retain funds and reduce borrowings.
2012 2011 N’000 N’000
7. Group Accounts
Share of year’s loss in associated company (UNICEM) 2,867,227 4,837,701
The figure was significantly down in March 2012 due to improved performance. This item hopefully, will not feature in 2013 since UNICEM has started posting positive monthly