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NFM profit falls 22 per cent
National Flour Mills (NFM) has reported an after tax profit of $16.5 million for the first six months of 2017 compared to $21.2 million in the first half of 2016, a decline of 22 percent year-on-year.
Revenue for the period decreased by 12.9 percent to $206.8 million.
“NFM’s performance in the first six months of 2017 is indicative of the continued contraction in demand in the local and regional economies.” NFM chairman Nigel Romano said in his report to shareholders
The company’s bottom line was also impacted by the 24 percent increase in the effective tax rate from 25 percent to 31 percent.
However, despite the recent increases in cost of key inputs, ongoing cost containment measures enabled NFM to realize a 3 percent increase in their gross profit margin.
“We also remain committed to providing safe quality food at affordable prices to the people of T&T as evidenced by the fact that flour prices have remained constant since 2008,” the chairman’s report said.
NFM stated that in the second half of the year it will continue to focus on new product sales and increasing exports to Caribbean and Latin American markets supported by their ongoing SQF Level 3 certification initiative.
“Management will also be focused on mitigating the risks posed by price volatility in the international commodity markets and will be paying very close attention to accessing reliable supplies of the foreign exchange necessary for raw material purchases and settling supplier credit.”
Romano added that the company usually performed better in the second half of the year due to the widely celebrated festivals of Divali and Christmas.
He added “Furthermore, while markets continue to be relatively depressed, our export sales initiatives are expected to provide an additional boost to revenues while they continue their “disciplined management” of expenses through continuous process improvement.”