Flour Mills Suffers 40.4% 9-Month Profit Slide, Despite Huge Tax Cut

Directors of Flour Mills of Nigeria Plc, on Thursday released its unaudited financials for the nine-month ended December 31, 2018, showing that while sales income fell slightly, when compared to the previous financials, there was a significant fall in net profit, despite an equally huge cut in tax expenses for the period, even as finance costs dropped.
While revenue for the period stood at N400.641bn, down 6.28% from N427.508bn reported in the prior nine months; the management successfully constrained cost of sales which only rose by 4.69% from N371.472bn in the corresponding period of 2017, to N354.047bn. This resulted in gross profit of N46.594bn, down by 16.85% from N56.036bn.
Selling and distribution expenses increased 46.95% to N5.932bn from N4.037bn; administrative expenses notched 12.21% to N14.937bn, as against the previous N13.311bn; even as net operating gains slumped from N5.507bn to N1.568bn, representing a 71.53% drop during the period.
Operating profit therefore dropped 38.24% from N44.194bn to N27.292bn; investment income for the period also notched 15.31% from N465.22m to N536.459m; just as finance cost reduced by 34.21% from N25.157bn in 2017, to N16.55bn.
Profit before tax therefore suffered a 42.17% decline from N11.278bn to N19.502bn; while tax expenses dropped by 45.92% to N3.382bn from N6.255bn; resulting in net profit for the period of N7.895bn, 40.4% down from N13.247bn reported in the corresponding period of 2017. This translated to Earnings Per Share of N1.93, 57.77% down from N4.56 reported in the prior 9-month.

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