NFM records drop in profit

NATIONAL Flour Mills (NFM) has recorded a six per cent decline of $303.6 million for the first nine months of 2019.In a newspaper advertisement dated November 16, the company’s chairman, Nigel Romano, said despite the implementation of new initiatives, including a new sales and marketing structure, NFM continues to feel the challenges[posed by the ‘tough economic environment” and increased foreign competition.” “This is reflected in the six per cent decline in year to date turnover of $303.6 million for the nine months ended September 30, 2019 compared to the prior year.”NFM also noted that it was “particularly concerned” about a 25 per cent fall in its gross profit margins over the same period. “The bottom line is that our net profit after tax as at September was $3.9m, 79 per cent less than 2018 principally because of the unexpected decline in our gross profit margins.” Romano said the decline was being investigated and had been recorded in the company’s financial statements. However, he said it is not all doom and gloom as global wheat processing had stabilised over the past nine months of 2019 as compared to 2018.NFM said its overhead costs continued to be “tightly managed,” with 2019 levels coming in six per cent lower than 2018. The company said it had begun “structural changes” for a “leaner operation,” including an upskilling and competency improvement initiative for employees.Its core business has to be “continuously improved,” it said, while it moves towards diversification.Romano concluded by assuring shareholders that the company remains committed to the transformation process to ensure NFM remains a commercially viable enterprise through “good governance and value creation.”