A range of NFM flour products. – File photo/Roger Jacob
NATIONAL FLOUR MILLS has slipped into the red, reporting a $783 million loss for the first quarter of 2022, ending March 31. The state-owned company incurred the loss after steady declines in profits in 2021, ending the year with a meagre $1.3 million.
Chairman Nigel Romano again attributed the company’s performance to global challenges, first brought on by the covid19 pandemic and now the ongoing Russian/Ukrainian war.
“As a result of the war the Black Sea region could be out of operation indefinitely resulting in disruptions to global markets and raising fundamental concerns about global food and energy security. The Russian invasion brought increased volatility to global markets, further disrupting supplies of grain and fuel, exacerbating rising inflationary trends,” Romano said on Friday, when NFM’s unaudited financials were released.
In its consolidated statement of comprehensive income, NFM saw a turnover of $110,406,000 for the first quarter of the year, a little over $10 million more than the first quarter of 2021. But the cost of sales went up to $91,952,000 from $78,790,000 compared to last year.
Cost of sales, selling and distribution expenses and administrative expenses whittled down revenue which amounted to $2,635,000.
In a bit of optimism, Romano said despite the global shocks, NFM is returning to a form of normalcy and is focusing on upgrading infrastructure as part of its ongoing improvement initiatives to ensure the safety of food and feed products.
“We continue to train and develop our workforce with an emphasis on accountability and value for money,” he said.
In March, when NFM released its 2021 results, the company said soaring international wheat prices eroded its profits down to $1.3 million, warning there may be another spike in the cost of flour. At the time, the company could not pay dividends to shareholders.
In its 2020 financial year, NFM reported a $23.5 million after-tax profit. At the time, it was enjoying increased profitability as its 2019 pre-pandemic results was $6.1 million.
Owing to wheat supply and shipping challenges, in 2021, the company increased prices for its flour and feed products.