For the first six months of this year, National Flour Mills Trinidad and Tobago's chief manufacturer and supplier of flour, made just $2 million in profit.
In its summary of consolidated income in the company's unaudited financial statements released on Monday, NFM revealed that from December 31 last year to June 30 this year, it had a turnover of $210 million but the cost of sales, selling and distribution costs, administrative expenses, finance costs and taxes whittled their turnover down to $2,145,000.
This marks an $11 million decline over the same period last year, when the company made $13,686,000 in profit. This decline also puts a significant dent in NFM’s earnings per share. Last year around the same period NFM earned 11 cents per share; this year, it has earned two cents per share.
Chairman Nigel Romano explained that shocks caused by covid19 and other factors, including reduced operating hours and poor quality grain, have eaten up their profits, despite seeing a 1.6 per cent increase in revenue year-on-year.
“From grain production through distribution and delivery of the final product every stage of the supply chain was significantly affected.
“NFM was affected by the worst wheat crop for 33 years both from a yield and quality perspective resulting in increases in grain prices – a situation that is not expected to improve as new variants of the virus (covid19) continue to delay a return to normalcy.” NFM gets its supply of wheat from the US.
Romano blamed the increase in the cost of sales on rising prices of all grain, “significant upticks” in the cost of freight and packaging and an 11 per cent increase in selling and distribution expenses caused by higher local transport costs and increased bad debt provisions.
“The overall impact was an 84 per cent decrease in operating profits ($3.3 million in 2021 as compared to $21.5 million in 2020) and an 82 per cent decline in earnings per share.
Romano said process optimisation and initiatives to continue improving the process of delivering flour to the nation, started in 2020, will now play an even greater role in their production process.
He added that about 25 per cent of staff members have been vaccinated.
“As we continue to do all in our power to join with the rest of the nation in fighting the pandemic NFM remains committed to keeping the price of flour at 2008 levels at this time,” Romano said.
“Our employees have been nothing short of phenomenal as they continue to go the extra mile to ensure that NFM fulfils its purpose of feeding the nation. We will continue to educate and enrol our employees (in vaccinations) and we expect to see our numbers (of vaccinated employees) grow since we believe that vaccinations save lives.”
Last year, NFM made $23,456,000 in profits after taxation. The current price of flour averages between $12 and $14 for a 2kg bag and between $57 and $64 for a 10 kg bag.