Dangote Flour Mills Plc. has recorded N78.11billion revenue for the 12-month period representing an increase of by 62.63 per cent against the year 2015 N48.03bn), despite the challenging operating environment, inflationary pressures, and weak purchasing power.
The strong performance for the year and return to profitability by the company was driven largely by several restructuring strategies adopted by the company, which include the reopening of the closed Dangote Flour Mills in
Kano with plans to grow wheat in the state, as well as reconstitution of new Board of directors and management.
With the performance thus far, the company appears to be out of the woods. Cost of sales as a percentage of revenue decreased to 73.97pp (12M’15: 90.70pp).
Despite direct costs pressure, gross profit improved by 355.03pp to N20.33billion, (12M’15: N4.47bn).
Hence, operating and post-tax profits came in at N8.37billion and N5.54billion respectively, compared to a loss after tax of N12.68 billion in the prior year.
Overall, the strong 2016 performance showed improvement in the company’s underlying fundamentals and intrinsic business value. We will be reviewing our valuation on the company and will communicate accordingly.