Event

Flour Mills Nigeria Plc (‘the Group’) demonstrated remarkable growth in both revenue and operating profit in Q3 2024, despite facing headwinds such as elevated input costs and FX volatility. Management attributed this performance to volume growth in the quarter which complemented the pricing implemented across its business segments.

Outlook

We expect further price increases to be taken in order to protect margins amid rising input costs, while the Group’s commitment to expanding its route-to-market also continues to bear fruit. However, the significant impact of FX losses on the Group’s profitability is expected to continue for the rest of the fiscal year. Considering the FX losses incurred by the Group in Q3 2023, we lowered our net profit projection for the Group. We now expect a net profit of N1.75 billion for FY 2024 (previously: N7.02 billion).

We maintain our HOLD recommendation for the stock, the Group’s improved operating profit propelled a review of our fair value to N36.36 (previously: N35.45). At the current price of N33.55, the stock offers a total return of 11% to our fair value, inclusive of a dividend yield of 3%.

Please follow the link “Flour Mills of Nigeria Q3 2024 – Blistering Operating Profit Amid Operating Challenges” to view the whole report.

Thank you.