Northern Nigeria Flour Mills Plc reports Q3 2026 pre-tax loss on slumping revenue, rising costs

NIGERIA – Northern Nigeria Flour Mills Plc (NNFM), a subsidiary of Flour Mills of Nigeria (FMN)  has reported a pre-tax loss of N584.87 million (US$0.41 million) for the third quarter of its 2026 financial year ended December 31, 2025, reversing a pre-tax profit of N2.31 billion (US$1.6 million) posted in the same period a year earlier.

The performance reversal contributed to a nine-month cumulative pre-tax loss of N143.6 million (US$0.1M) from a N4.11 billion (US$2.9 million) profit in the prior corresponding period.

The results reflect a significant erosion in core profitability for the flour and semovita milling firm listed on the Nigerian Exchange (NGX).

NNFM’s third-quarter revenue declined sharply to N4.33 billion (US$3.0 million), down 48.8% from N8.47 billion (US$5.9 million) in Q3 2025.

The slump in sales fed directly into gross profit, which fell 85.9% to N241.8 million (US$171,000) from N1.71 billion (US$1.2 million).

The company’s gross margin compression was compounded by a near-collapse in other operating income, which swung from contributing over N1.1 billion (US$770,000) in Q3 2025 to a negative N254.1 million (US$180,000) this year.

Administrative expenses ticked up marginally, while selling and distribution expenses declined, indicating subdued commercial activity.

Finance costs surge

A critical driver of the quarterly loss was finance cost escalation. Finance charges jumped to N181 million (US$128,000) from just N19,000 in Q3 2025.

Despite the company reporting no external borrowings, the spike points to elevated intra-group or lease-related finance expenses, pushing the operating result into a loss of N409.7 million (US$290,000) and ultimately contributing to the pre-tax loss.

Earnings per share swung to a negative 329 kobo from 1,296 kobo year-on-year.

Over the nine months ending December 2025, NNFM’s cumulative revenue fell 37.8% to N18.37 billion (US$12.8 million).

Gross profit for the period declined 65.1% to N1.33 billion (US$930,000), while finance costs jumped roughly 17-fold to N234.7 million (US$164,000). These trends resulted in the nine-month pre-tax loss of N143.6 million.

Despite weak earnings, NNFM’s balance sheet exhibited resilience. Total assets increased 18.3% to N31.97 billion (US$22.3 million) on the back of higher inventories and receivables.

Cash and deposits improved to N1.69 billion (US$1.18 million) from N1.04 billion (US$727,000) at the end of December 2024, helped by positive working capital movements.

The company reported no short- or long-term debt, keeping leverage low. However, trade payables held a negative position, and other payables rose to N20.77 billion (US$14.5 million), suggesting elevated related-party balances.

Shareholders’ equity declined to N9.48 billion (US$6.6 million) from N12.05 billion (US$8.4 million) year-on-year, primarily due to the retained earnings drop.

Outlook

NNFM remains the 104th most valuable stock on the NGX, with a market capitalisation of approximately N15 billion (US$10.5 million), significantly above its net asset base.

The company’s free float stood at N4.90 billion (US$3.4 million), representing 32.61% of outstanding shareholding at 31 December 2025, indicating limited public liquidity. Share price gains in 2025 delivered a 92% return, but the stock has traded flat so far in 2026.

Management cited the combination of steep demand contraction, margin pressure, the absence of strong non-operating income and rising intra-group finance costs as key factors in the quarterly loss.

The company’s ability to rebuild volume, secure stable margins and tightly manage finance costs will be critical as it seeks to stabilise performance in the remainder of the financial year.

Sign up to HERE receive our email newsletters with the latest news and insights from Africa and around the world, and follow us on our WhatsApp channel for updates.