Shareholders of Flour Mills of Nigeria Plc have seen N2.89bn increase in dividends as the company proposed a payment of N1.20 dividend per share for the 2018 financial year.

The shareholders approved the payment of the dividend at the company’s Annual General Meeting in Lagos.

The dividend amounted to N4.92bn, compared to the N2.03bn dividend paid for the 2017 financial year.

The company had in July proposed a 20 per cent increase in its dividend for the 2018 financial year.

It said its audited financial results for the year showed a 30 per cent decrease in financing cost and a strengthened balance sheet that would enable the group to increase its dividend by 20 per cent.

It added that its total net debt reduced by N21.2bn while finance cost dropped by N9.8bn.

An analysis of the company’s financial statement showed a decrease in gross profit from N68.8bn to N53.4bn while the operating profit reduced to N32.3bn from N48.2bn in 2017.

Profit before tax declined from N16.4bn in 2017 to N10.2bn in 2018 while profit after tax decreased to N4bn from N13.6bn.

Flour Mills also saw a decrease in its revenue from N542.4bn to N527.4bn.

Cost of sales increased to N474.1bn from N473.9bn while the selling and distribution expenses increased to N8.2bn from N6.2bn. Administrative expenses remained unchanged at N19.4bn.

The company said continuous growth was envisaged in key segments such as food and agro-allied as targeted strategies delivered improved margins and operational efficiencies.

It added that the continuous implementation of turnaround initiatives in the agro-allied business, accelerated expansion in the business-to-consumer segment, optimal operation of supply chain and further balance sheet management were expected to result in higher profitability.

The Chairman, Flour Mills, Mr John Coumantaros, said the company had continued to make inroads into the Nigerian market, using innovation as a foundation in quest of delivering quality and creating value for consumers, customers and key stakeholders.

He said, “Our strategy to further restructure our balance sheet base and optimise the financing costs achieved appreciable results with the significant reduction in net debt by N21.1bn, while financing costs reduced by N9.8bn.

“The board recognises the importance of dividends and the need to generate returns for shareholders, hence, the increase in dividend.”