The Na­tion­al Flour Mills (NFM) has record­ed a loss of $1.7 mil­lion for the first nine months of the fi­nan­cial year, ac­cord­ing to its unau­dit­ed re­sults.

The re­sults could have been worse had NFM not raised the price of its ma­jor com­mod­i­ty, flour, and the com­pa­ny not­ed the price in­creas­es im­ple­ment­ed ear­li­er this year helped to grow rev­enue up by 16.1 per cent from $319.7 mil­lion in Q3 2021 to $371.2 mil­lion.

How­ev­er, the NFM said this was not suf­fi­cient to off-set the in­creased cost of sales, and even though its in­di­rect ex­pens­es re­mained rel­a­tive­ly sta­ble over the pe­ri­od, op­er­at­ing prof­it de­creased by 57.5 per cent com­pared to the pri­or year.

The com­pa­ny al­so cit­ed sev­er­al ex­ter­nal fac­tors im­pact­ing busi­ness.

It not­ed the Rus­sia-Ukraine war, the slow­down of the Chi­nese econ­o­my and ris­ing geopo­lit­i­cal ten­sions across the globe con­tin­ued to im­pact glob­al sup­ply chains and the cost of food and fu­el, lead­ing to surg­ing in­fla­tion in al­most every coun­try in the world.

In ad­di­tion, the im­pact of cli­mate change, in the form of in­creased rain­fall in some ar­eas and drought in oth­ers added more com­plex­i­ty to the op­er­at­ing land­scape.

Cli­mate change has al­ready ad­verse­ly af­fect­ed the glob­al sup­ply of wheat, the NFM al­so not­ed, adding that droughts and ex­ces­sive heat in North Amer­i­ca and In­dia have re­sult­ed in de­mand ex­ceed­ing sup­ply for wheat which led to price es­ca­la­tions so far this year; a trend the com­pa­ny ex­pects to con­tin­ue.

“The is­sues above im­pact­ed our op­er­a­tions with cost of sales in­creas­ing by 21.4 per cent year-on-year, up from $256.7 mil­lion to $311.9 mil­lion,” the com­pa­ny said.

Notwith­stand­ing these chal­lenges, the NFM said sig­nif­i­cant ef­forts were made to in­crease in­ven­to­ry lev­els to en­sure a re­li­able sup­ply to cus­tomers, with de­liv­ery of prod­ucts meet­ing all on time and in-full bench­marks.

In ad­di­tion, the com­pa­ny is in­vest­ing in plant and equip­ment to en­sure it pro­vides safe, qual­i­ty food and feed prod­ucts for cus­tomers as it con­tin­ues on the jour­ney to SQF Lev­el Three Cer­ti­fi­ca­tion.

“The in­crease in ac­counts re­ceiv­ables was a di­rect re­sult of the price in­crease im­ple­ment­ed this year and the at­ten­dant in­crease in cred­it lim­its for our cus­tomers. We wish to as­sure all our stake­hold­ers that de­spite these chal­lenges, we con­tin­ue to ex­plore ad­di­tion­al av­enues to serve our cus­tomers, add new cus­tomers, lo­cal­ly and re­gion­al­ly, di­ver­si­fy our prod­uct rev­enue streams and im­prove the ef­fi­cien­cy of our op­er­a­tions,” the NFM added.