Business News
Flour Mills seeks license for power generation
Flour Mills of Nigeria Plc has announced plans to proceed with the application for an Electric Generation License.
Flour Mills of Nigeria Plc has announced plans to proceed with the application for an Electric Generation License.
According to a release signed by the company’s secretary, Umolu Joseph noted that new license is in compliance with section 70 (2) of the Electric Power Generation Sector Reform Act. The license will enable Flour Mills to obtain an embedded electricity generation license to operate a 70MW power plant to be located in Apapa.
What this means for the company
Flour Mills will generate more revenue from this power project, boost its bottom-line; also the new power project will also reduce the operating cost of the company. Figures from its full year ended March 2018 shows it spent N3.7 billion as power cost as compared to N3.2 billion in 2017.
In its recently released financial results for the period ended June 30, 2018, the company’s revenue plummeted from N148 billion in June 2017 to N133 billion in June 2018. Profit before tax also dropped from N6 billion in June 2017 to N5 billion in June 2018. Profit after tax also plummeted from N4 billion in June 2017 to N3.6 billion in June 2018.
Shareholders of the company recently approved the firm’s N2.032 billion total dividend for the 2017 financial year. The food and agro-allied company paid a total N2.03 billion dividend translating to N1.00 per for every 50 kobo share.
Flour mills of Nigeria Plc was incorporated in September 1960 as a private limited liability company and has been serving the needs of generations of Nigerians ever since. In 1978, FMN became a public limited liability company and its shares were subsequently listed on The Nigerian Stock Exchange.
Flour mills’s interest in becoming the nation’s leading food business company is furthered by entities operating in agriculture, livestock feed and pasta manufacturing.
The firm currently has over twelve thousand full and part-time employees, and has since been steering the green revolution in Nigeria with the use of locally sourced materials to develop and produce unique consumer products for local markets
Economy & Politics
BREAKING: CBN reduces MPR to 12.50%, holds other metrics
Central Bank of Nigeria (CBN) has reduced the Monetary Policy Rate (MPR) from 13.50% to 12.50% and retains CRR at 27.5%, Liquidity ratio at 30%.
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has reduced the Monetary Policy Rate (MPR) from 13.50% to 12.50%.
Governor, CBN, Godwin Emefiele, disclosed this while reading the communique at the end of the MPC meeting on Thursday in Abuja. Meanwhile, other parameters such as the Cash Reserve Ratio (CRR) remained at 27.5%, Liquidity ratio at 30%.
Details later …
Economy & Politics
Just in: Buhari seeks approval from green chamber to borrow fresh $5.5billion
Buhari, is also seeking the approval for the revised 2020-2022 mid-term expenditure framework (MTEF) which became necessary as a result of the crash in crude oil prices and the cut in the production output.
President Muhammadu Buhari is seeking the approval of the House of Representatives to borrow fund to finance capital projects at the federal and state (to support state governors) levels in the 2020 budget.
This request was disclosed via the official twitter handle of the House of Representatives.
The president’s letter, which indicated that the fund would be sourced locally and internationally, was read on the floor of the House of Representatives by the Speaker, Femi Gbajabiamila, during plenary on Thursday, May 28, 2020.
In the letter to the lower chamber, Buhari, is also seeking the approval for the revised 2020-2022 mid-term expenditure framework (MTEF) which became necessary as a result of the crash in crude oil prices and the cut in the production output.
Although the tweet did not contain the total amount of loan that is being requested, reports suggests that the President is seeking approval to borrow the sum of $5.513 billion from external sources to finance 2020 budget deficit and support state governments to meet challenges caused by the coronavirus pandemic.
President @Mbuhari is also seeking the House approval to borrow locally & internationally to finance capital projects as well as finance projects to support state governors in the 2020 budget
The letter was referred to the House Committee on loans & debt management. #HousePlenary— House of Reps NGR (@HouseNGR) May 28, 2020
Details shortly…
Business News
CBN’s MPC unlikely to cut rates, as Nigeria’s foreign reserves hit $36.16 billion
Note that Nigeria’s inflation could potentially rise to 14% by the end of the year due to a higher VAT and a weakened naira.
The CBN’s Monetary Policy Committee (MPC) is expected to leave the interest rate of 13.5% unchanged during its meeting later today.
The projection is coming on the heels of macroeconomic fundamentals released by the National Bureau of Statistics (NBS), which showed that inflation rose to 12.34%; its seventh consecutive monthly rise and highest level since April 2018.
Note that Nigeria’s inflation could potentially rise to 14% by the end of the year due to a higher VAT and a weakened naira. Therefore, in order to minimise the risk of exacerbating inflationary pressures, the CBN is unlikely to further cut rates. This possible outcome from the MPC meeting will help stimulate economic growth, just like it did in 2019.
Meanwhile, despite the foreign exchange liquidity crisis being experienced in the currency spot market, data obtained from CBN revealed that the country’s foreign exchange reserves have further increased to $36.16 billion (Gross Estimate) as of 28th of May, 2020.
(READ MORE: Naira depreciates to N460/$1 at the parallel market, despite improved liquidity)
The surge in Nigeria’s external reserves is due to the fact that the price of crude had gained more than 40% since the deadly COVID-19 pandemic started, coupled with reports that foreign investors are returning to Nigeria. The disbursement of $3.4 billion emergency facility by the International Monetary Fund (IMF) to CBN has also been a contributing factor.
Recall that the CBN Governor, Godwin Emefiele, had promised more liquidity in the currency market, assuring that all genuine dollar demands would be met.
However, an Interest rate expert, Ola Oladele, during a phone chat with Nairametrics, advised that the CBN should keep its word by boosting Nigeria’s Forex supply as the persistent downtrend in the currency black market continues. She said:
“The depreciation of the naira in the parallel market as a result of low supply of FX from official sources and less optimistic outlook on the economy due to falling oil prices.
“The BDCs haven’t received supply from official sources since our borders were closed and the crash in oil prices has made natural sellers of FX more cautious.
“We hope that the recent statements by the regulator will restore confidence and subsequently, supply to the market.”
