Last Updated on 6 November 2024 by Naijadazz
Flour Mills of Nigeria Plc (FMN), one of the leading food and agro-allied companies in Nigeria, has announced a strong financial performance for the first half of its 2025 fiscal year (H1’25). The company reported significant growth across all key financial metrics, despite the challenging macroeconomic environment. The H1’25 results reflect the effectiveness of FMN’s strategic initiatives, operational efficiency, and its resilience in managing external pressures such as foreign exchange volatility, inflation, and high interest rates.
Key Highlights
- Revenue Growth: FMN’s revenue surged by 76% to N1,697.5 billion in H1’25 from N964.6 billion in the same period last year. This impressive growth reflects strong demand across all its core business segments, including Food, Sugar, and Agro-allied operations.
- Gross Profit: Gross Profit increased by 53% to N161.1 billion. The improvement in gross profit was driven by solid performance in the Food and Sugar segments, as well as effective cost control measures.
- Operating Profit: FMN’s Operating Profit saw a 40% increase, rising to N105.9 billion from the previous year’s N75.6 billion. This increase was primarily driven by operational efficiencies, cost optimization, and strategic investments in key business areas.
- Profit Before Tax (PBT): The company’s Profit Before Tax for the period stood at N19.7 billion, a significant recovery from the loss position recorded in H1’24. This turnaround highlights FMN’s ability to rebound from previous financial setbacks and demonstrate its strength in navigating a volatile operating environment.
- Cash Position: FMN ended H1’25 with a robust cash balance of N149 billion, providing the company with operational flexibility to support ongoing and future growth initiatives. Despite rising financing costs, FMN’s strong cash position provides the liquidity required to weather macroeconomic challenges.
Segment Performance
Food Segment
The Food segment remains the largest revenue contributor to FMN, accounting for a substantial portion of the group’s overall growth. In H1’25, the Food segment recorded a 74% increase in revenue, reaching N1,140.2 billion. This growth was driven by higher demand for food products in both domestic and international markets, as well as the company’s ability to optimize material costs and improve its cost structures.
FMN’s focus on improving product quality, enhancing distribution channels, and expanding its product range have contributed significantly to the increased revenue. The group’s commitment to enhancing local content development has also played a key role in driving growth in the Food segment.
Sugar Segment
The Sugar segment was the star performer for FMN in H1’25, recording an 84% increase in revenue, which amounted to N274.2 billion. The impressive growth was a result of FMN’s continued investment in its sugar refining and production capabilities. The company has strengthened its position in the sugar industry through innovations, improved efficiencies, and increased domestic production capacity.
The Sugar segment’s growth is also attributable to the favorable regulatory environment for sugar production in Nigeria, which has led to an increase in demand for locally produced sugar. FMN’s long-term strategy of building a self-sufficient, sustainable sugar industry has helped the company achieve these exceptional results.
Agro-allied Segment
FMN’s Agro-allied segment, which includes its operations in animal feeds, fertilizer, and other agro-based products, also delivered strong performance. While the segment saw steady growth, it was outpaced by the Food and Sugar segments in terms of revenue growth percentage. Nevertheless, the Agro-allied business remains a key driver of FMN’s overall profitability.
Strategic Investments and Operational Efficiency
FMN’s strong performance in H1’25 can be attributed to its continued focus on operational efficiency, cost optimization, and strategic investments. The company’s ability to manage rising input costs, improve productivity, and streamline operations has been central to its success in a high-inflation, low-interest-rate environment.
In line with its long-term strategy, FMN has invested in modernizing its production facilities and expanding its distribution networks. These initiatives have enhanced the company’s capacity to meet rising demand and increase market share in key segments, such as food and sugar.
Additionally, FMN has been actively working on improving its sustainability practices by focusing on local sourcing, reducing its carbon footprint, and enhancing supply chain management. These efforts have not only helped the company achieve higher profit margins but also reinforced its commitment to being a responsible corporate citizen.
Recovery and Profitability Turnaround
One of the most noteworthy achievements for FMN in H1’25 is the company’s ability to recover from a loss position in H1’24. The company reported a N19.7 billion Profit Before Tax, a sharp turnaround from the losses recorded in the same period last year. This recovery underscores the company’s resilience and its ability to adapt to the ever-changing business environment.
FMN’s focus on improving operational efficiency, cost control, and optimizing its product portfolio helped the company regain profitability. Moreover, the company’s commitment to local sourcing and manufacturing allowed it to mitigate the negative impact of foreign exchange volatility and inflation, further contributing to its profitability.
Financial Position and Liquidity
FMN’s strong financial position is further evidenced by its impressive cash balance of N149 billion. Despite the challenging economic environment, the company has maintained a robust liquidity position, which provides the financial flexibility needed to pursue future growth opportunities and navigate the increasing cost of financing.
The company’s strong cash flow is also a reflection of its ability to generate consistent revenue from its diversified business segments. FMN’s healthy liquidity position ensures that it can continue to invest in capacity expansion, technological upgrades, and product innovations without compromising its operational capabilities.
Strategic Focus
Looking ahead, FMN remains focused on executing its strategic initiatives, which include product innovation, cost optimization, and strategic alliances aimed at fostering growth across Africa. The company is committed to expanding its market share in existing and new markets, while also enhancing the value it provides to shareholders and other stakeholders.
Commenting on the H1’25 results, Mr. Boye Olusanya, Group Managing Director/CEO of FMN, stated, “At the core of our business operations is our commitment to building a sustainable business that is big in local content development and utilization. This is what we leverage as a Group in withstanding both existing and emerging volatility in the business environment. Despite the complex macroeconomic environment, we have maintained solid growth across all our business segments while managing our costs and operational efficiency.”
FMN’s commitment to innovation, sustainability, and local content development is at the heart of its growth strategy. The company’s ability to create value across its food, sugar, and agro-allied businesses will continue to support its long-term success in the highly competitive Nigerian and African markets.
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