Flourmills of Nigeria delivers solid full-year earnings

Flourmills of Nigeria has reported a remarkable 127% rise in profit after tax to 25.7 billion naira for the year ending 2021. This surge in profit was driven by a substantial average revenue gain of 34% across all business sectors, thanks to the successful implementation of the company's Agro-allied turnaround strategy. Anders Kristiansson, the Chief Financial Officer of Flourmills of Nigeria, shed light on the factors behind these impressive financial numbers in a recent interview. Kristiansson attributed the company's stellar performance to three key factors: the outstanding growth of the agro-allied sector, investments in affordable products with higher local content, and an expansion in product availability across various consumer markets. The Chief Financial Officer highlighted the company's deliberate focus on the agro-allied sector over the past four years, which has yielded significant returns. Despite initial challenges, including a period of losses, Flourmills of Nigeria has successfully turned around the agro-allied business to generate substantial revenue. By investing in a diverse range of products such as edible oil, animal feed, fertilizers, and starches, the company has tapped into thriving value chains within the agricultural sector. Additionally, launching new affordable product lines with increased local content has driven consumer demand and bolstered sales volumes. Moreover, expanding product distribution channels has ensured wider accessibility of Flourmills of Nigeria products to a larger consumer base. The global COVID-19 pandemic posed challenges to businesses worldwide, and Flourmills of Nigeria was no exception. Kristiansson highlighted the company's efforts to prioritize safety measures for employees, customers, and communities. Despite disruptions in supply chains and fluctuating consumer affordability, Flourmills of Nigeria navigated through these obstacles by managing external factors such as forex availability and maintaining competitive pricing strategies. Looking ahead, Flourmills of Nigeria remains focused on optimizing its business segments, particularly the agro-allied sector, fertilizer business, animal feed segment, and food sector. With a strong emphasis on backward integration, the company aims to enhance local production capabilities by investing in agricultural land and supporting farming communities with resources like fertilizers and seeds. By collaborating with industry associations and governmental organizations, Flourmills of Nigeria is committed to driving sustainable agricultural practices and increasing local production of key commodities like maize and palm oil. In terms of financial initiatives, Flourmills of Nigeria recently embarked on a 70 billion naira bond program to refinance existing debt and create opportunities for future expansion. The successful issuance of two bonds totaling 30 billion naira at competitive interest rates signifies the company's commitment to long-term financial stability and growth. Looking towards the future, Kristiansson projected a continuation of Flourmills of Nigeria's growth trajectory, with a focus on driving value chains, expanding B2C market share, optimizing distribution networks, and enhancing backward integration efforts. The company has steadily increased its profit margins over the past three years, and anticipates sustained growth in the upcoming fiscal year, building upon its strong foundation and strategic initiatives.