Flour Mills of Nigeria Plc. (FMN) Group, the market leader in food and agro-allied products in Nigeria, today announces its unaudited half year results for six months ended 30th September 2018.
- The Group increased its market share in some product categories, in a somewhat
challenging environment with lower consumer spending. The Group’s Revenues were
N269.74 billion, compared to N298.44 billion of the same period last year, with an increase in the Group’s share of the market.
- The Group recorded a 49% increase in selling and distribution expenses of N4.13 billion,
compared to N2.77 billion of the same period last year, as it increased its marketing
- The Group recorded a growth in investment income of N290 million, a 6% increase
when compared to N270 million of the same period as last year. The increase being
attributed to short term investments.
- The Group recorded a notable drop in its finance cost from N16.27 billion in Q2, 2017 to
N11.23 billion in Q2, 2018. A 31% drop which is due to settlement of overdraft facilities
and replacement of high interest yielding loan facilities with cheaper loan facilities.
Flour Mills of Nigeria Plc (The Company)
- The Company, Flour Mills of Nigeria Plc recorded a revenue of N202.92 billion, compared
to N216.77 billion of the same period last year. The 6% reduction in revenue is mainly due
to a minor drop in sales volume which is precipitated by the persistent traffic challenges
- Administrative expense was N7.55 billion, compared to N5.87 billion in the same period
as last year. The 29% increase is mostly driven by increase in employee cost and other
Commenting on the result, Paul Gbededo, the Group Managing Director said:
“In the face of persistent economic challenges and a difficult operating terrain, we continue
to pursue our growth strategy to gain market share in all key product segments. Operations in Apapa continues to suffer major setbacks in traffic and logistics challenges, impacting in a marginal drop in our volume and top line activities.
With improved marketing and promotional activities for most of the key food businesses, we envisage new gains in the remaining part of the year, as we continue to focus on innovative products that deliver on great consumer experience.”
About Flour Mills of Nigeria Plc
Incorporated in September 1960 and quoted on the Nigerian Stock Exchange since 1978, Flour Mills of Nigeria (FMN) Plc. is one of Nigeria’s leading food and agro-allied companies. With a broad basket of food products, an iconic brand “Golden Penny” and a robust pan-Nigerian production, distribution, and supply chain network, FMN is a fully integrated and diversified food and agro-allied group.
The FMN group strives in its mission to “Feed the Nation, Everyday” through its five core food
value chains: Grains, Sweeteners, Oils and Fats, Proteins, and Starches. FMN creates value
along the entire food chain with its “farm-to-table” model by providing inputs and know-how to farmers, aggregating and sourcing crops and raw materials to supply its world-class
processing facilities across Nigeria, and distributing its innovative food brands to its customers.
First Bank’s board replacement won’t affect profitability – Fitch
CBN’s remedial actions will not have a material effect on the group’s asset quality, profitability and capitalisation.
Fitch Ratings has affirmed that the recent First Bank board replacement will not affect the bank’s profitability and asset quality, as it rates the bank at B- with a negative outlook.
This was disclosed by the rating firm via a statement seen by Nairametrics.
According to the rating firm, the development reflects its view that the impact of the Central Bank of Nigeria’s replacement of FBNH and FBN Ltd boards, the identification of corporate governance failings and the imposition of corrective measures are tolerable at the rating level.
What Fitch is saying
It stated, “We have assessed the near-term financial impact of these actions on FBNH and FBN and believe this is tolerable at the rating level, even though the final outcome is uncertain. In our view, any remedial actions imposed by the CBN, including a potential reclassification of related-party exposures as impaired, will not have a material effect on the group’s asset quality, profitability and capitalisation.
However, this does not consider any possible additional actions by the CBN, especially if FBN fails to implement the regulator’s corrective measures or if there were any further uncovering of corporate governance irregularities.
The Outlook remains Negative, reflecting FBNH’s pre-existing asset quality and capitalisation weaknesses as well as the group’s corporate governance weaknesses highlighted by the CBN. These could put pressure on the ratings.”
What drives First Bank’s rating
FBNH is the non-operating holding company that owns FBN. FBNH’s ratings are aligned with those of FBN (which represents around 90% of consolidated group assets) due to high capital and liquidity fungibility within the group, and low double leverage (at 95% at end-1H20) at the holding company level.
It added that FBNH’s IDR is driven by its intrinsic creditworthiness, as defined by its ‘b-‘ Viability Rating (VR). The rating, according to Fitch, considers the group’s exposure to Nigeria’s volatile operating environment and also factors in vulnerability in its capital position in the context of moderate earnings generation and asset-quality pressures, where headroom above the minimum regulatory capital requirements is also moderate. Capitalisation is a factor of high importance to VR.
“The new boards appointed to FBNH and FBN comprise individuals with sufficient experience and expertise. However, we view such major change as hugely disruptive. There are no changes in FBNH and FBN’s executive management team.
“We believe the governance shortcomings cited by the CBN reflect poorly on FBNH’s reputation and on the group’s governance and control practices. As a result, we have revised down our assessment of FBNH’s Management and Strategy score to ‘b-‘ from ‘b’.
“We also assigned a negative outlook to this factor, which reflects the uncertainty surrounding additional remedial actions that the CBN may impose due to these related party exposures as well as the potential for further uncovering of governance irregularities. It also captures the lack of track record of the new board and its ability to restore confidence in FBNH and FBN,” it added.
Asset quality remains a rating weakness. FBNH reported an improved impaired loan ratio of 7.9% at end-1Q21 (end-2020: 7.7%). However, FBNH’s reported reserve coverage of 54.5% at end-1Q21 (end-2020: 48%) remains significantly weaker than domestic peers’.
“Our assessment indicates that if the related-party loan highlighted by the CBN were classified as impaired, the ratio would be unlikely to be above 10% (excluding any new impaired loan generation from ordinary business),” Fitch added.
What you should know
On 29 April 2021, the CBN removed the non-executive directors on the boards of FBNH and FBN and replaced them with new individuals appointed by the apex bank, according to Nairametrics.
The CBN gave a series of reasons for its action including the unjustified and unapproved change of the bank’s MD/CEO by the former board, corporate governance failings pertaining to long-standing insider loans that were affecting the bank’s capitalisation and failure to comply with regulatory directives.
Airtel Nigeria announces appointment of Surendran as new Chief Executive Officer
Airtel Nigeria, has announced the appointment of Mr C. Surendran as the new MD/CEO with effect from August 1, 2021.
Telecommunications giant, Airtel Nigeria, has announced the appointment of Mr C. Surendran as the new Managing Director and Chief Executive Officer with effect from August 1, 2021.
Surendran would be replacing the outgoing Managing Director and Chief Executive of Airtel Nigeria, Olusegun Ogunsanya, who has been elevated to the position of Chief Executive Officer of Airtel Africa Plc with effect from October 1, 2021.
According to a report from the News Agency of Nigeria, this disclosure is contained in a statement issued by Airtel on Wednesday, May 5, 2021, in Lagos.
The statement says that Surendran would also be appointed to the Executive Committee (ExCo) as Regional Operating Director, reporting to the CEO of Airtel Africa plc, and onto the Board of Airtel Networks (Nigeria) Limited.
Airtel in its statement said, “Surendran has been with Bharti Airtel since 2003 and has contributed immensely in various roles across customer experience, sales and business operations.
He was the Chief Executive Officer of Karnataka, which is the largest circle in Airtel India, with over one billion dollars in revenue.
Surendran delivered an exceptional performance with significant movement in Revenue Market Share (RMS) over the last few years, currently at 54 percent. He has over 30 years of business experience, including 15 years at Xerox.’’
Airtel said that Surendran would transition into his new role from June 1, 2021, and spend the time onboarding into the business until July 31, 2021.
In case you missed it
It can be recalled that a few days ago, Airtel Africa Plc, a leading provider of telecommunications and mobile money services in Nigeria and 13 other countries, announced the appointment of Mr Olusegun Ogunsanya as the new Chief Executive Officer, following the notice of retirement given by the current Managing Director/Chief Executive Officer, Raghunath Mandava, to the Board.
In the notification sent by Airtel Africa to the Nigerian Exchange, Ogunsanya is expected to join the board of Airtel Africa with effect from October 1, 2021.
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