The depreciation of the nation‘s currency late last year has impacted on the profit before taxation of the Flour Mills Group. The profit went down from N9.9bn in the last financial year to N5.5bn during the current year.
According to the Chairman, Mr. G.O Coumantaros, the group‘s financial performance was adversely affected by the impact of a major and dramatic devaluation of the naira in December 2008.
In the company’s annual report obtained by our correspondent on Saturday, he said, ”Flour Mills of Nigeria Plc sustained a foreign exchange loss of N6.2bn in respect of its exposure to trade finance lines. In addition, a member of Flour Mills Group, BAGCO Morpack, recorded a loss of about N246m in respect of a foreign currency denominated facility. Consequently, the Group posted profit before taxation of N5.5bn as against N9.9bn last year.”
The turnover, however, rose by 41 per cent to an all-time record of N180.1bn due largely to volume increase and significant increases in the cost of raw materials.
According to Coumantaros, the turnover went up from N104bn to N147bn, representing an increase of 42 per cent.
”After adjusting for the full impact of the exceptional foreign exchange loss of N6.2bn, the profit before taxation went down to N3.6bn as against N7.1bn of the preceding year. After tax for the financial year was N2.5bn compared with N4.3bn.
He, however, said that the company would guard against losses, which might occur in the event of any further devaluation of the naira.
He added that the board would also recommend to shareholders, at the Annual General Meeting, a dividend payout of N854.1m at 50 kobo per ordinary share payable net of withholding tax.
On the performance of the various products of the conglomerate, he said Golden Penny Flour continued to sustain its pre-eminent position in the Nigerian flour market through the Golden Penny brand and its flagship products – Golden Penny Flour and Golden Penny Semovita.
He added that BAGCO was also maintaining its position as the premier provider of flexible woven polypropylene packaging for the handling, storage and transportation of powdered and granular products in Nigeria.