ByYakubu LAAH InvestAdvocate

Lagos (INVESTADVOCATE) – Shareholders of Dangote Flour Mills Plc, operating in the Food/ Beverage and Tobacco Sector of the Nigerian Stock Exchange (NSE) will suffer a 60 percent (60%) loss in the year 2010 dividend payment.

To record the loss in dividend payment in the Audited Year Ended December 31 2010, the Firm in year 2009 end paid investors a final dividend of 50 kobo per Ordinary Share of 50 Kobo each amounting to N2.5 billion.

However, as at the time of filling in this Report, no closure date of Registers of shareholders who are to benefit from the 20 Kobo dividend was announced.

Dangote Flour in the Result Announcement to the Nigeria’s Exchange affirmed in due course, that the remaining Corporate Information would be made available to the NSE for the benefit of its shareholders and the general public.

A review of the Company’s Audited Year Ended December 2010 released Friday at the NSE in Lagos Nigeria shows that After Tax (PAT) of Dangote Flour slipped by 51.0 percent (51.0%)

To record the slip, the Firm’s PAT dropped from N5.561 billion in year 2009 to N2.723 billion in year 2010 end; indicating a slip of 51.0% in the review period.

Profit Before Tax (PBT) also dipped from N5.374 billion in year 2009 to N4.912 billion in the Audited Year Ended December 2010; representing a dip of 8.6%.

While Turnover increased from N61.388 billion in year 2009 to N67.601 billion in year 2010; showing an increase of 10.12%.

Analyst from Afrinvest while commenting on the Result from their Research Noted affirmed that the Company reported an unusually high tax burden (N2.2bn) which eroded net earnings.

“It is however important to note that the there was a 30.6% decline from the unaudited pre-tax profit figure of N7.1bn to N4.9bn (FY 2010)” Afrinvest said.

According to Analysts from Afrinvest,   Dangote Flour has repeatedly announced FY bottom line numbers (FY 2009, FY 2010) which fall below the preceding quarter’s unaudited results and this gives cause for concern.

The Firm said that the Dangote Flour proposed 20kobo dividend, fell below their expectations, translating to a dividend yield of 1.3%.

“While we acknowledge the adverse impact of rising commodity prices and a dearth of adequate infrastructure on the Company’s cost profile, these results still come in way below our expectations.

It is however encouraging that top-line growth has been maintained. Profitability margins worsened in FY 2010; PBT and PAT margins fell by 150bps and 510bps to 7.3% and 4.0% respectively from the 8.8% and 9.1% reported in FY 2009. This was also 3.5% and 6.4% lower than our estimates of 10.8% and 10.4% for pre and post-tax margins respectively” the Afrinvest Analyst said.

Dangote Flour Mills is one of the Companies that were placed on full suspension by the Nigeria’s Exchange for its failure to release its current Annual Accounts; until recently.