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Dangote Flour Plc has explained its inability to declare dividend to shareholders, attributing it to huge losses the company incurred in the cause of its operations in the last four years.
Addressing shareholders at the company’s 11th Annual General Meeting (AGM) on Friday, the Chairman, Asue Ighodalo said the flour making company which change from Tiger Branded Consumer Goods Plc in 2016 to Dangote Flour Plc, recorded accumulated losses of N23.1 billion as at September 30, 2015.
Responding to shareholders questions on the financial statements for the period ended December 31, 2016, Ighodalo said “I wish to inform you our esteemed shareholders that despite the good performance of our company in the current financial year, the directors are unable to recommend a dividend payment.
According to him “Unfortunately, despite the best efforts of your board and management the accumulated loss position was not fully extinguished by the current year’s results. We are therefore unable to declare any dividend because financial standards and regulatory considerations only allow payment of dividends from accumulated profits”
Commenting on the performance of its major products, the chairman said after a well-considered review of the dynamics of its Noodles business, the continued losses being recorded and poor future outlook which is at variance with the company’s medium term strategic focus, prompted the board to discontinue the business and dispose of its plant and machinery.
He pointed out that the Noodles business recorded a 31.7 percent increase in volumes and 56.9 percent increase in sales turnover.
According to him “gross profit was N1.4 billion, however we made a net loss of N108 million. Despite continued pressure on input cost, the performance represented an improvement of N11. Billion compared to the previous financial year”.
On the flour business, he said they reopened its Kano plant and improved on its sales and operations capabilities, as sales volume increased by 65.3 percent while turnover increased by 13.8 percent, resulting in a gross profit of N25.6 billion. While the company Pasta business performance also represented a major improvement compared with the previous years. Sales volumes increased by 41.7 percent while revenue increased by 85.5 percent.
Ighodalo added that “the key focus area in the near future includes, sustaining our high products quality, improving our customer engagement strategies and strengthening our supply chain capabilities.
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