N N FLOUR MILLS SEEKS BOTTOM

As its volume declined 50.7% to 4.07 tonnes in nine months, Northern Nigeria Flour mills is currently seeking a bottom.

According to figures for the period released this week, consequent on the volume drop, core revenue dropped by 39.3% to N461.1m and cost of sale decreased by only 24.7% to N513.2 thus hinting at higher unit cost.

Hence, unlike within the same period previously, the search for a bottom started as gross profit was not feasible, instead gross loss of N52m was recorded, compared to N78.1m profit hitherto.

Eventually, total loss within the nine months came to N38.85m principally as other gains grew by 13% to N182.4m; and as administration cost shrank by 3.51% to N184.1m.

Both positive developments helped cushion the added effect of 133.6% increase in selling and distribution cost to N2.57m and dive in interest income by 28.6% to N17.5m.

But even at that, compared to N72.05m profit by December 2015, the N38.85m loss represented not only 153.9% dive in profitability but also meant NN Flour Mills had a hole in the pocket losing N5.88 on each N100 income.

Not quite a healthy condition to be in and indeed, by December, the company's liquidity position had worsened from N292.7m working capital deficit to N409.2m.

Surely, NN Flour mills could do with a bottom to bounce back from as soon as possible.
NN FLOUR MILLS: Nm
           Nine months
                 2016.         2015
Total inc. 661.0.        945.6
Core reve.461.1.       759.7
Cost of sale 513.2.    681.7
G. profit.     (52.0).      78.1
Distribution. 2.57.       1.1
Admin.         184.1.    190.8
Other gains 182.4     161.4
Interest inc.  17.5       24.5
Profit b4 tax (38.85)  72.05
Margin %      (5.88).   7.62
Working cap(409.2) (292.7)

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