Modupe Gbadeyanka
By Modupe Gbadeyanka
The first flour milling company in the northern part of the country, Northern Nigeria Flour Mills Plc, has released its financial statements for the year ended March 31, 2017.
In the results analysed by Business Post, fortunes of the firm continued to nosedive when compared with its performance in the last five years.
The flour miller declared a loss after tax of N16.234 million majorly caused by the N16.639 million it paid as tax during the year.
A year ago, the company had declared a loss of N197.240 million as well as N199.558 million decline in 2015.
During the year under review, Northern Nigeria Flour Mills posted a profit before tax of N450,000 in contrast to loss before tax of N233.1 million declared 12 months ago.
As at March 31, 2017, the company posted a turnover of N940.521 million versus N979.038 million achieved as at March 31, 2016.
During the period, its operating profit stood at N8.364 million compared with N280.480 million decline posted a year ago.
During the year under review, the company upgraded its D-Mill plant, which had been idle due to the suspension of wheat production in 2015.
It was gathered that the management of the firm incurred significant costs to upgrade the facility to being suitable for milling sorghum, which is a new addition to its product lines.
Other operating income during the period under review was the intra-group subsidy of N390 million.
Northern Nigeria Flour Mills pays a subsidy for every metric tonne of sales volume short of 50,000 metric tonnes.
In the current year, it was disclosed that the parent firm approved to increase in the subsidy from N5,000 per metric tonne to N9,000 per metric tonne.
In the past two years, the company recorded total comprehensive loss of N11.359 million (2016: N175.67 million), which were cushioned by the intra-group subsidy provided by the parent company.
With the exclusion of the intra-group subsidy, the total comprehensive loss for the year would have been N401.37 million compared with N377.13 million in 2016, which is a potential threat to the going concern of the firm.
“Despite the loss making situation, there is no material uncertainty on the ability of the flour milling company to continue as a going concern,” its independent joint auditors said in their report.
