National Flour Mills Ltd’s profit for the first half of this year fell by 84 per cent when compared to the same period last year.
For the six months ended June 30, 2021 NFM’s profit after taxation was $2.145 million.
This was a $11.5 million decrease compared to the $13.686 million profit after taxation NFM recorded for the six months ended June 30, 2020.
“The second quarter of 2021, saw an extension of the devastating effects of the pandemic. Every stage of the supply chain, from grain production through distribution and delivery of the final product were significantly affected,” NFM’s chairman Nigel Romano stated.
“NFM was affected by the worst wheat crop for 33 years both from a yield and quality perspective, resulting in increases in grain prices, a situation that is not expected to improve as new variants of the virus continues to delay a return to some level of normalcy,” he stated.
Romano said NFM continues to be impacted by disruptions to the global supply chain which resulted in shortages of other raw and packaging materials.
“These factors, coupled with reduced operating hours, negatively affected NFM’s ability to supply our valued customers with orders on time and in full,” he stated.
Despite these challenges, however, Romano noted that NFM was able to achieve a 1.6 per cent increase in revenue year on year.
NFM’s cost of sales increased by 12 per cent, Romano stated.
“The increase in cost of sales was mainly due to rising prices of all grain at source and significant upticks in the cost of freight and packaging. Selling and distribution expenses increased by 11 per cent year on year due to higher local transport costs and increased bad debt provisions,” he stated.
Romano said NFM will continue to utilise all avenues available to manage its grain purchasing efforts to source raw materials at the lowest possible prices while ensuring the availability of supplies.
“Th process optimisation and continuous improvement initiatives, which were started in 2020, will now assume even greater significance as we work to increase operational efficiency,” he stated.
NFM said so far more than a quarter of its employees have been vaccinated.
“We will continue to educate and enrol our employees and we expect to see the numbers grow, since we believe that vaccinations save lives,” Romano stated.