Flour Mills of Nigeria (FLOURMI) has surged 22% month-to-date by mid-September, showing resilience despite negative investor sentiment affecting Fast-Moving Consumer Goods (FMCG) stocks amid the naira’s devaluation.
In its financial results for the period ended June 30, 2024, the company reported a pre-tax profit of N7.36 billion, a significant recovery from the pre-tax loss of N9.33 billion recorded during the same period the previous year.
Although the stock’s price movement and trading volume were stagnant in August following the release of the results, September has seen a notable 22% increase in share price as of the second week.
This rise comes even as FMCG companies in Nigeria continue to grapple with foreign exchange losses caused by the weakening naira.
What to know:
- Most FMCG companies in Nigeria posted pre-tax losses in the first half of 2024 compared to the same period in 2023, largely due to the naira’s devaluation.
- The currency’s decline spiked the cost of importing raw materials and worsened debt obligations denominated in foreign currency.
- Despite these challenges, Flour Mills defied the trend, reporting a pre-tax profit of N7.36 billion for the period ending June 30, up from the N9.33 billion loss recorded the previous year. Revenue also surged 67% year-on-year.
After the company’s financial report was released on July 31, 2024, its stock took time in August to consolidate before gaining momentum. By the second week of September, the share price had soared more than 20%.
Stock Market Performance
Flour Mills has maintained a solid bullish trend, starting from 2020 and continuing through 2024, even as many FMCG companies in Nigeria have struggled in the stock market this year.
Despite a brief retracement in February 2024 that saw the stock dip to a low of N30.55, it rebounded in May, gaining over 40% through to mid-September.
The stock closed at a high of N54.50 on September 13, with market volume in September reaching 14 million shares—an impressive 70% increase compared to August’s total volume.
First-Half Performance
The company’s revenue for the first half of 2024 jumped 67% year-over-year, while pre-tax profit rose to N7.36 billion.
Earnings per share also improved, shifting from a negative N2.49 in the first half of 2023 to a positive N1.94 in 2024.
Commenting on the company’s performance, Group Managing Director Boye Olusanya said, “Our consistent execution and growth underscore FMN’s financial and operational resilience.”
“Despite the challenging economic environment, we have solidified our position as a market leader in the food and agro-allied sector, driven by innovative product offerings and efficient operations.”
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