Dangote Flour Mills, at the midweek, presented its audited result for the year ended December 31, 2016 showing a strong return to profit, from its N12.679bn loss reported in the preceding full year, despite the N2.165bn or 121.97% rise in foreign exchange losses from N1.775bn in 2015 to N3.94bn; and the N996m or 25.59% growth in finance cost to N4.887bn.
Revenue for the year rose to N105.765bn from the previous N48.026bn, representing a N57.739bn or 120.22%; with an analysis of the revenue showing that flour contributed the lion’s share of N81.69bn or 77.23%; up from N34.303bn; just as spaghetti, macaroni and other pasta products garnered N1.5672bn from N8.366bn; while noodles segment recorded N8.402bn from N5.356bn. Cost of sales rose from N43.558bn to N76.417bn, a difference of about N32.859bn or 75.43%, just as cost of materials consumed rose from N37.82bn to N67.757bn, resulting in gross profit of N29.347bn, as against the N4.468bn reported in 2015.
Other income stood at N1.382bn, of which N1.244bn came from ‘haulage recovery’ from previous year’s N817.021m; as against N1.177bn; distribution and administrative expenses rose from N9.788bn to N11.804bn, boosted by the N4.792bn distribution expenses, up from N3.649bn; followed by N2.111bn from employee cost, from N1.26bn in 2015. These brought operating profit before impairment and foreign exchange losses of N18.925bn, from the N4.142bn loss in prior year.
Impairment of property, plant and equipment and investment was positive at N1.05bn, from a N2.658bn negative. When this is considered along with the foreign exchange loss, profit before tax rose to N16.035bn, up by N7.458bn or 86.95% from N8.577bn.
The net finance cost resulted in profit before tax of N11.818bn, from a loss of N12.466bn; while the N1.249bn income tax, up from N213.097m; brought profit after tax to N10.569bn from the previous N12.679bn loss, which translates to earnings per share of 212 kobo, from the previous 251 kobo loss.
The result is the first since Dangote Industries Limited, reacquired 3.2bn ordinary shares or 65.6% majority equity stake in the the company, rebranded Tiger Branded Consumer Goods (TBCG) Plc, from Tiger Brands Limited, the South African core investors through the negotiated cross deal window of the Nigerian Stock Exchange (NSE) at N1.24 per share.
DIL had in 2012 sold 63.35 of its equity stake in DFM to Tiger Brands in a $181.9 million deal, leading to the transfer of 3.17bn ordinary shares of Dangote Group’s 3.67bn ordinary shares of 50 kobo each. The deal then was approximately valued at more than N28bn, according to prevailing exchange rate.
The resale followed an agreement with DIL on December 11, 2015, after successive losses and impairing of assets,.