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Content Partners

Flour Mills’ dividend may increase by 20% despite economic headwinds

Flour Mills projects its dividend payout may increase by 20%.

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Flour Mills of Nigeria Plc

As companies begin to turn in the reports of their audited financial results, close observations point to the fact that Nigeria’s prevailing economic headwinds and unfriendly operating environment may have been hugely responsible for the performances, especially for 2018 business year. According to available data, the country’s economic slow pace of growth since its recovery from the recession has been reflected in the financial records of some quoted companies in recent times.

The manufacturing sector is not left out of this quandary as some of the companies continue to strive to remain profitable and justify shareholder investment. From recent statistics, manufacturing production in Nigeria increased by 0.40 per cent in March 2019 compared to the same month in the previous year.

Flour Mills of Nigeria Plc

Looking across the companies especially in the face of dwindling consumer purchasing power are companies like Flour Mills of Nigeria Plc, Dangote Flour, Honeywell Flour Mills Pc, Unilever, PZ, International Breweries Plc, Honeywell Flour Mills Plc, Skyway Aviation Handling Company Plc (SAHCO), amongst others.

[READ ALSO: Flour Mills seeks license for power generation]

A glance: While International Breweries recorded a loss before tax of N8 billion in 2018 from the N3.23 billion that was recorded in 2017, SAHCO’s loss before tax stood at N302.895 million in stark contrast to a Profit Before Tax of N125.901 million recorded in 2017. With this, the aviation company witnessed a reversal of fortune in its profitability, resulting in a loss after tax of N665.649 million in the year under review as against the profit of N217.727 million it posted in the year before.

Similarly, Honeywell Flour Mills Plc witnessed a profit decline from N4.42 billion in 2018 to N68.36 million in 2019. As expected, profit also falls for Flour Mills Nigeria Plc, as the company witnessed contractions in sales and profitability having recorded a net profit decline from N13.6 billion in the prior fiscal period to the N4 billion it recorded in its 2019 financial period.

A look into Flour Mills of Nigeria Plc’ 2018 fiscal year: For the year ended March 31, 2019, the company’s turnover dropped from N542.67 billion in 2018 to N527.40 billion in 2019. Gross profit dropped from N68.8 billion in 2018 to N53.3 billion in 2019.

More so, profit before tax declined to N10.17 billion in 2019 as against N16.54 billion in 2018. After taxes, net profit dropped to N4 billion in 2019 as against N13.6 billion in 2018. Consequently, earnings per share dropped from N4.83 in 2018 to N1 in 2019.

Laudable highlights:  From information contained in its financial statement, the company’s finance costs fell 30 per cent to N22.9 billion in 2019 from N32.7 billion in 2018 and N32.5 billion in 2017, while the group’s Q4 2018/19 improved by N1.9 billion.

According to the investor presentation on its website, the company said “Flour Mills will continue active balance sheet management and the objective is to achieve additional reduction in finance costs in the current year”.

In view of Flour Mills’ impressive performance in the last quarter of the fiscal period as a result of the company’s series of strategic actions, Flour Mills proposed dividend increase of N0.20k to N1.20k per share, which is a 20 per cent increment.

Commenting on the 2019 Q4 result, the company’s Group Chief Finance Officer (CFO), Anders Kristiansson said the company’s strategy to restructure the balance sheet base and optimize the financing costs, have started to yield the desired results, as the business records increasing levels of efficiency.

Kristiansson said, “Despite ongoing pressures on consumer disposable income in many of our target categories, we continued delivered a stronger quarter 4 than last year.”

About the company: Incorporated in September 1960 and quoted on the Nigerian Stock Exchange (NSE) in 1978, Flour Mills of Nigeria 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 robust pan-Nigerian production, distribution, and supply chain network, Flour Mills is a fully integrated and diversified food and agro-allied group.

"NM Partners" represent articles published in partnerships with Corporate Organisations, Government and Non-Governmental Institutions, and other stakeholders seeking to publish content on Nairametrics. Content includes Press Releases, Targeted content, and other forms of corporate communications targeted at our readers. Some of these content are paid for.

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CHI Limited celebrates its maiden Hollandia Dairy Day

The Hollandia Dairy Day Conference is a public interest initiative created to highlight the importance of dairy in everyday nutrition and healthy living in Nigeria.

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Nigeria’s leading dairy brand, Hollandia, is set to hold the maiden edition of its Hollandia Dairy Day. The event which will be celebrated on the 18th of May 2021 will provide a veritable platform to drive national discourse on the unrivaled health and nutrition benefits of dairy consumption to people of all ages.

Set to be hosted as a conference, the theme of this year’s event is “Dairy Nourishment to Support Healthy Living”, and it focuses on the vital role dairy consumption plays in our everyday nourishment, its benefit to our overall health, and why dairy products should be included in our diets every day.

This conference, which is designed as a hybrid of physical and virtual event, will feature presentations, interviews and panel discussions from health experts and nutritionists as they provide insights and share perspectives to guide informed decisions about dairy consumption as part of a daily balanced diet. The event is opened to the public through the brand’s multiple social media platforms.

According to a report by the Food and Agriculture Organization of the United Nations, 2019, Nigeria has low dairy consumption levels per head – 15 to 20 liters’ per capita consumption. This is partly attributable to low purchasing power of the average Nigerian household, who rank milk and dairy products as non-essential luxuries and prioritize other staple foods such as rice, beans, and yam.

By provoking the conversations and stimulating public action/intervention, Hollandia aims to drive consciousness for dairy consumption and its importance to achieving optimum health, and to get many more Nigerians drinking, using, and consuming dairy products.

The past year has presented unprecedented shocks and disruptions, including a global COVID-19 pandemic. As communities throughout the world look for ways to minimize the risk of COVID-19, maintaining and boosting good health is top of mind for many. Dairy foods such as milk and yogurt contain essential nutrients, including Vitamins A and D, Zinc and Protein, which support immune function.

The Hollandia Dairy Day Conference is a public interest initiative created to highlight the importance of dairy in everyday nutrition and healthy living in Nigeria.

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Mastercard New Payments Index: Consumer appetite for digital payments takes off in Nigeria

78% of consumers in Nigeria say digital payments methods help them save money.

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  • 96% of consumers in Nigeria are considering emerging payments such as wearables, biometrics, digital wallets and currencies, and QR code, in addition to Contactless, according to the Mastercard New Payments Index
  • 86% of Nigerian consumers have access to more ways to pay compared to this time last year
  • 78% of consumers in Nigeria say digital payments methods help them save money
  • 81% say they are more loyal to retailers who offer multiple payment options and would shop at small businesses if offered more diverse ways to pay

As the world went into pandemic lockdown in 2020, consumers shifted their spending habits to embrace contactless tap-and-go payments and online shopping. As stores closed and social distancing took hold, retailers worldwide moved their businesses online, embraced e-commerce and explored the potential of new ways to pay. More than a year later, research from Mastercard shows that the adoption of new payment technologies is rising, and consumer appetite for new, fast and flexible digital experiences continues to grow.

The Mastercard New Payments Index shows 96% of Nigerian consumers will consider using at least one emerging payment method, such as cryptocurrency, biometrics, contactless, or QR code, in the next year.

Over two-thirds of respondents (66%) agree they have tried a new payment method they would not have tried under normal circumstances, but the pandemic has galvanized people to try flexible new payment options to get what they want, when they want it. With this interest and consumer demand also comes a greater expectation for businesses to provide multiple ways to shop and pay. In fact, 81% of Nigerian consumers say they are more excited about shopping at retailers who offer the latest payment methods.  Additionally, (78%) Nigerian consumers say that digital payment methods help them save money.

“The pandemic made us think differently, partly out of necessity,” said Craig Vosburg, Chief Product Officer at Mastercard. “To deliver the choice and flexibility that consumers need – and increasingly expect –retailers worldwide need to offer a range of payment solutions that are easy to access and always on.  As we look ahead, we need to continue to enable all choices, both in-store and online, to shape the fabric of commerce and make the digital economy work for everyone.”

Contactless technology was the digital catalyst to explore new payment options because of its fast, secure, and touch-free experience. Between the first quarter of 2020 and the same period in 2021, more than 100 markets saw contactless as a share of total in-person transactions grow by at least 50 percent.  A year into the COVID-19 pandemic, contactless is showing its staying power and dynamism – in the first quarter of 2021 alone, Mastercard saw 1 billion more contactless transactions worldwide as compared to the same period of 2020. All signs point to a continued growth path for contactless, with nearly 7 in 10 consumers globally anticipating using a contactless card this year.

“The world as we now know it has changed dramatically since the outbreak of the pandemic, accelerating long-term shifts in consumer transaction and payment methods. We continue to work with our merchants, fintechs and banking partners to rapidly innovate payment options that meet consumer needs while ensuring we drive financial and digital inclusion,” said Raghav Prasad, Division President, Mastercard, Sub-Saharan Africa.

Looking to the future, digital currencies and wallets, wearables, biometrics, contactless and QR codes are trending as emerging payments technologies as people’s comfort with them and understanding of them increases and the use of cash decreases. In fact, 86% of consumers in Nigeria have more ways to pay compared to this time last year. The exploding interest in new payment technologies may encourage businesses to expand their options at checkout. The Mastercard New Payment Index found:

  • Cryptocurrency1 Gains Ground – Today consumers can buy, sell, and trade cryptocurrency as a commodity or investment. Consumers are also increasingly showing interest in being able to spend crypto assets for everyday purchases. As global interest in digital currencies continues to accelerate, 6 in 10 people (65%) in Nigeria say they plan to use cryptocurrency in the next year, with 76% noting they are more open to using it than they were a year ago. While consumer interest in cryptocurrency – especially floating digital currencies such as Bitcoin – is high, work is still required to ensure consumer choice, protection, and their regulatory compliance. Earlier this year, Mastercard announced that it will start supporting select cryptocurrencies directly on its network.
  • Biometric Payments are More Trustworthy – Perceptions of safety and convenience have been front and center for people over the past year. 49% of Nigerian consumers say they plan to use biometric verification methods like gait or walk assessments and fingerprint authorization. In fact, over 6 out of 10 people (66%) feel safer using biometrics to verify a purchase than entering a pin.
  • QR Codes are Cleaner and More Convenient – Growing markets are leveraging QR-based options as a clean and convenient way to interact with merchants. Consumer desire for clean and convenient ways to pay will remain post-pandemic. 54% of people in Nigeria expect to use more payment technologies like QR codes in the next year. Consumers also find that that QR codes are cleaner (75%) and more convenient (77%) for in-person payments and have a significant potential to reduce cost of payment acceptance and increase financial
  • Digital Wallets Surge in Popularity – Nigeria is seeing a surge in the popularity of digital wallets. 73% of Nigerian consumers said they were likely to use digital wallets next year. 66% of shoppers even say that they feel safer storing their card information in one place such as a digital wallet.

To Meet People’s Demands, Businesses Forced to Jump into Emerging Payment Trends

With consumer interest around new payment technologies, the expectation for businesses to adapt for the long-term is here to stay. Over three in four Nigerian consumers (84%) say that they would shop at small businesses, if they offered more payment options, and 81% noted being more excited to shop at retailers that can offer the latest payment methods, and an equal proportion (81%) said they would be more loyal to retailers who offered multiple payment options.

This behaviour shift is reinforced by the desire for consumer choice – with 89% saying that they expect to make purchases when they want and how they want. The businesses that can provide multiple ways to shop and pay are best positioned to meet these expectations. As the demand for emerging payments and choice continues, it requires a wider range of payment solutions, insights, and products to meet the accelerating enthusiasm for the future state of pay.

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