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Flour Mills lists N30b CPs on FMDQ

Flour Mills of Nigeria Plc has listed two commercial papers (CPs) worth N30 billion on the FMDQ Securities Exchange, paving the way for holders of the CPs to trade on their holdings.

Flour Mills listed its N10 billion Series 13 and N20 billion Series 14 CP notes on the FMDQ. The CPs were issued under the flour-milling company’s N100 billion CP issuance programme. Flour Mills has a short-term rating of A2 and long-term rating of BBB+ from Global Credit Rating (GCR).

Nigeria’s leading flour miller, Flour Mills had in April 2020 raised N30 billion in short-term debts through the issuance of another tranches of commercial papers. Flour Mills offered commercial papers of 182-day and 269-day tenors with effective yield of 6.75 per cent and 7.7499 per cent under its series 13 and series 14 commercial papers. Minimum subscription to the offer was N5 million and subsequently in multiples of N1,000.

Meanwhile, FMDQ reiterated its commitments to providing required supports to governments, corporates and individuals as most businesses across the globe continue to grapple with the economic effects of the COVID-19 pandemic.

FMDQ noted that the Nigerian CP market has remained a viable option for corporate entities looking to raise funds to meet shortfalls in their working capital needs, as well as other short-term expenditures.

According to the FMDQ, as with previous papers issued under the programme and like all other securities listed, quoted and traded on the FMDQ Exchange platform, the newly listed Flour Mills’ CPs shall be availed market visibility through FMDQ Exchange’s website and systems; transparency through their inclusion in the FMDQ Daily Quotations List; governance and continuous information disclosure to protect investor interest; amongst other benefits derived from the preferred admission to FMDQ Exchange.

“As the economic impact of COVID-19 continues to crystallise, FMDQ Group remains steadfast in contributing towards the emergence of a resilient financial market in Nigeria. The Group and its subsidiaries – FMDQ Exchange, FMDQ Clear Limited, FMDQ Depository Limited and FMDQ Private Markets Limited – shall continue to engage the market and invariably, deploy innovative strategies leveraging on the unrivalled capabilities within its vertically integrated market infrastructure to promote market development and expansion,” FMDQ stated.

FMDQ reassured that it would continue to deliver innovative and dependable capital market solutions to Nigeria achieve its dream of diversified economic development.

Recent operational report had shown that Flour Mills sustained steady growth in sales and profitability in the third quarter with net profit rising to N8.16 billion within the nine-month period.

Key extracts of the interim report and accounts for the nine-month period ended December 31, 2019 showed that turnover rose to N423.48 billion in 2019 as against N400.64 billion recorded in corresponding period of 2018. Profit before tax increased from N11.28 billion to N12.29 billion. Profit after tax also rose from N7.9 billion to N8.16 billion.

The third-quarter report represented a major improvement in the returns outlook of the flour-milling company and lent credence to strategic initiatives by the management after the company reported a negative performance in the immediate past business year.

Flour Mills of Nigeria had witnessed contractions in sales and profitability in the immediate past business year as net profit declined by 70.6 per cent from N13.6 billion in 2018 to N4 billion in 2019.

Key extracts of the audited report and accounts of Flour Mills of Nigeria for the year ended March 31, 2019 had shown that trunover dropped by 2.8 per cent from N542.67 billion in 2018 to N527.40 billion in 2019. Gross profit dropped by 22.4 per cent from N68.8 billion in 2018 to N53.3 b illion in 2019. Profit before tax declined by 38.5 per cent to N10.17 billion in 2019 as against N16.54 billion in 2018. After taxes, net profit dropped by 70.6 per cent 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.

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