November 4, 2024/CSL Research
In its recently released H1 2025 results, Flour Mills of Nigeria Plc. (Flourmill) reported a 76.0% y/y Revenue growth to ₦1,697.48 billion from ₦964.65 billion in H1 2024. On a quarterly basis, Revenue grew by 22.4% q/q, reaching ₦934.29 billion in Q2 2025 compared to ₦763.19 billion in Q1 2025. We attribute the Revenue growth to increases in price to mitigate rising costs and prevent excessive margin deterioration.
Across operating segments, Revenue from Flourmill’s food segment advanced by 74.5% y/y to ₦1,140.24 billion from ₦653.48 billion in H1 2024. The segment accounted for 67.17% of total Revenue in H1 2025 compared to 67.74% in H1 2024. The sugar segment appreciated by 83.7% y/y to ₦274.17 billion from ₦149.21 billion in H1 2024. Contribution of the segment to total Revenue was 16.15%, up from 15.47% in H1 2024. Revenue from the agro allied and support service segments grew to ₦251.00 billion and ₦32.06 billion in H1 2025, contributing 14.79% and 1.89% respectively to overall Revenue, and up by 75.2% and 71.3% y/y from ₦143.24 billion and ₦18.72 billion in H1 2024 when they accounted for 14.85% and 1.94% of total Revenue. Annualized asset turnover for Flourmill was 1.77x in H1 2025, up from 1.54x in FY 2024.
Flourmill’s Cost of Sales grew by 78.8% y/y to ₦1,536.39bn from ₦859.14bn in H1 2024. This growth was driven in part by jumps in material cost (+80.5% y/y to ₦1,419.79bn), power cost (+113.1% y/y to ₦46.80bn), and repairs & maintenance (+62.8% y/y to ₦17.43bn), reflecting the effect of currency depreciation and the high inflation. Gross Profit for Flourmills was up 52.7% y/y to ₦161.09bn from ₦105.51bn in H1 2024 while Gross Margin dipped to 9.5% in H1 2025, down from 10.9% in H1 2024.
Flour Mills Nigeria, H1 2025 (Nm)
Source: Company Financials, CSL Research |
Total Operating Expenses for Flourmill surged to ₦63.85bn in H1 2025 compared to ₦37.35bn in H1 2024, pressured by increases in selling expenses (+181.1% y/y to ₦14.82bn), advertisement (+214.8% y/y to ₦9.32bn), salaries, wages & other staff costs (+41.5% y/y to ₦14.58bn), general administrative expenses (+58.9% y/y to ₦4.66bn), and bank charges (+76.6% y/y to ₦3.79bn) across the Selling and Distribution, and Administrative expenses line. Overall, OPEX margin for Flourmill in H1 2025 settled at 3.8%, marginally down from 3.9% in H1 2024.
The company’s EBITDA for H1 2025 was ₦124.19bn, a 33.1% y/y increase from ₦93.33bn in H1 2024 while EBITDA margin for Flourmill in H1 2025 compressed by 2.4 percentage points to 7.3%, down from 9.7% in H1 2024. Furthermore, Flourmill’s Operating Profit grew by 39.6% y/y to ₦105.94bn in H1 2025 compared to ₦75.92bn in H1 2024 while Depreciation and Amortization inched up slightly by 4.7% y/y to ₦18.24bn for H1 2025 from ₦17.42bn in H1 2024. The company’s EBIT margin for H1 2025 stood at 6.2%, 1.6 percentage points lower than the 7.9% recorded in H1 2024.
In H1 2025, Flourmill’s Net Finance Costs rose modestly by 2.5% y/y to ₦86.19 billion, compared to ₦84.05 billion in H1 2024. Investment income saw a substantial increase, reaching ₦4.32 billion in H1 2025—more than double the ₦1.77 billion recorded in H1 2024—driven by higher returns on cash balances and fixed deposits. However, Finance Costs increased by 27.0% y/y, totaling ₦43.97 billion in H1 2025, up from ₦34.61 billion in H1 2024. This growth was mainly due to higher borrowing costs from expanded debt issuance. By the end of H1 2025, Flourmill’s total commercial paper and bond issues reached ₦313.93 billion, a 43.3% increase from ₦219.06 billion in H1 2024. Additionally, Foreign Exchange (FX) losses declined, with Flourmill recording ₦46.55 billion in H1 2025, down 9.1% from ₦51.22 billion in H1 2024.
Flourmill recorded a Profit Before Tax position of ₦19.75bn in H1 2025 compared to a loss of ₦8.14bn in H1 2024. After accounting for an Income Tax Expense of ₦5.33bn, Profit after Tax for Flourmill settled at ₦14.42bn, up 272.0% y/y from a loss of ₦8.38bn in H1 2024.
Flourmill had recently notified the Nigerian Exchange Limited and the public of an offer from the majority shareholder of the company – Excelsior Shipping Company Limited (Excelsior) – to acquire all the shares held by the minority shareholders in Flourmill. This is to be implemented via a Scheme of Arrangement between Flourmill and the minority shareholders, with a court-ordered meeting scheduled for Thursday 14 November 2024 for existing minority shareholders to approve for Excelsior to acquire all outstanding shares not currently owned by them, aiming to increase their ownership to 100%. If the Scheme is approved at the court-ordered meeting and consequently sanctioned by the Federal High Court, Flourmill will be delisted from the Nigerian Exchange Limited and transition to a private company. It is noted that the proposal offers current minority shareholders immediate return on investment, as well as a favourable exit strategy should the company eventually delist and become a private entity. Under this proposal, each minority shareholder will receive ₦70.00/share, representing a premium of 12.90% over the last traded price at ₦62.00/share.
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FLOURMILL H1 2025 Quick Take.pdf
