Apr 2017 Financial News

NFM sees 'only' 2% profit hike

Apr 03, 2017

The National Flour Mills (NFM) is reporting $34.7 million in profit after tax for the period ended December 31, 2016. This represents a two per cent increase from the previous year where NFM reported $34 million.

Like many in the business community, NFM’s bottom line took a hit due to the depreciation and shortage of US currency.

According to the chairman’s statement accompanying the financial results, NFM chairman Nigel Romano said the excellent operating results were almost totally eroded by additional finance costs of $8.4 million, “mainly due to the depreciating exchange rate and interest and penalty charges associated with late payments to foreign suppliers as a result of delays in accessing foreign currency.”

The NFM chairman also noted that the company’s 20 per cent increase in its tax rate, from 25 to 30 per cent, resulted in the milling company’s effective tax rate jumping to 38 per cent, “primarily due to deferred tax adjustments.”

Looking at its liquidity position, the company reported an improvement in its cash position to $94.4 million for the period ended December 31, 2016 compared to $65 million in the previous year. The improvements in its cash position resulted in NFM increasing its assets, said Romano.

“The total assets of the company grew by 17 per cent mainly due to our improved cash position. Earnings per share increased to $0.29 with the calculation reflecting the impact of the Employee Share Ownership Plan shares being treated as treasury stock in 2016.”

It’s asset position increased between 2015 and 2016, from $429 million in 2015 to $502.8 million in 2016.

NFM, according to Romano, embarked upon a major asset improvement programme which would be financed from its internally generated funds.

Its segmented revenue declined due to overall flat volume sales and a “decline in feed and bulk export segments of $24 million due to weak local demand and very aggressive pricing in the export markets.”

Source:
Trinidad Guardian, A14
Monday April 3, 2017