Aug 2016 Financial News

Amid forex challenges $21.2m profit for NFM

Aug 15, 2016

Although the foreign exchange supply continues to be a challenge for National Flour Mills (NFM) the company reported net profit after tax of $21.2 million for the six months ended June 30. This is a three per cent increase over the corresponding period in 2015. 

Chairman Nigel Romano said the company achieved an increase in profit “despite a three per cent decline in revenue, indicative of the continued contraction of demand in the local economy.”

The company moved from a loss-making cash position in June 2015 to earn $124.5 million in cash and cash equivalents this year. Total assets increased from $379.2 million in June 2015 to $470.2 million.

Romano said the company’s gross profit position improved for 2016. 

“Cost containment measures, including management of the mix of raw materials and insurance premiums which favourably impacted cost of sales, resulted in a 22 per cent improvement in gross profit,” he said.

However, NFM’s administrative expenses increased by 17 per cent “due to system and process upgrades amid at increasing productivity and improving inventory management.”

The supply of foreign exchange and depreciating rate are two main challenges for the company, Romano said, as it uses foreign currency to purchase raw materials and to settle foreign supplier commitments.

“Foreign currency availability, coupled with the cost implications of the deteriorating exchange rate, represents the single greatest challenge to our positive outlook for 2016, always keeping in mind the goal of delivering value for our clients, security for our workforce and sustainable profitability for our investors,” he said.

Priority areas for the company include looking at growth in regional and extra-regional markets and moving toward more local content as it seeks to increase sales revenues and mitigate its foreign exchange challenges, the chairman said.

Source:
Nadaleen Singh
Trinidad Guardian
Monday August 15, 2016

http://www.guardian.co.tt/business/2016-08-15/amid-forex-challenges-212m-profit-nfm