These are not the best of times for shareholders of Dangote Flour Mills Plc in the days leading to the purchase of the company’s entire issued shares by Singaporean commodity trader- Olam Nigeria Limited (READ MORE).
The company’s half-year unaudited financials presented to the Nigerian Stock Exchange (NSE) showed that the company, once more, slipped into negative territory in the period under review, just as sales revenue declined, with the cost of sales wiping the entire turnover. The net loss could have been higher, but for the tax credit of N2.5bn, compared to the N1.148bn tax expense for the period ended June 30, 2018.
Sales revenue for the half-year dropped from N56.39bn to N48.74bn, representing a decline of N7.65bn or 13.57%; with revenue from flour accounting for N40.772bn, from N48.875bn in 2018; while spaghetti, macaroni, and other pasta products contributed N7.968bn from N7.518bn.
Cost of sales rose from N47.722bn to N49.607bn; resulting in a gross loss of N867.011m, compared to the previous profit of N8.668bn, as cost of materials consumed rising to N43.087bn from N42.854bn, direct labour cost stood at N1.546bn from N1.161bn; direct overhead cost, N2.672bn from N1.771bn; and other overheads, N873.379m, a rise from N797.878m; among others.
Other income rose to N1.087bn from N769.911m; distribution and administrative expenses jumped to N7.55bn, rising by N2.187bn or 40.72% from N5.372bn in the similar period of 2018, boosted by the combination of allowance and other impairments of N1.839bn, as against N1.05bn; N1.711bn employee costs, up from N917.849m in the prior half-year; just as distribution expenses climbed from N1.002bn to N1.403bn, among others. Operating loss, therefore, stood at N7.33bn, compared to the previous profit of N4.065bn
Finance income (interest income on bank deposits) fell to N160.846m, from N2.053bn; while cost (short-term borrowings and interest on letters of credit) dropped from N1.719bn to N1.503bn; resulting in loss before tax of N8.673bn, as against the profit of N2.137bn.
The tax rebate left net loss for the period at N6.172bn; compared to the N1.148bn tax expense in the corresponding period of 2018 that left a profit for the period at N3251bn, translating to Loss Per Share of 123.18 kobo, up from its previous 65 kobo earnings.