Shareholders laud Dangote Flour Mills despite nil dividend declaration

Even though Dangote Flour Mills (DFM) Shareholders received no dividend for investing in the company last year, feedback from shareholders revealed that the financial position and return to profitability of the company is sufficient enough reward after declaring losses for the previous four years.

A shareholder who spoke at the company’s 11th Annual General Meeting held in Lagos on Friday applauded the company for reviving the Kano factory, which helped to improve sales volumes as well as turnover.

In the business year under review, the company’s flour business reopened its Kano plant and improved on its sales and operations capabilities.

The shareholder speaking to the Directors at the meeting, while holding and referring to pages 47 and 48 of the company’s annual report, said, “I want to commend you for this result.

It clearly shows that this board is highly proactive and ready to tackle the problems of this company.

You have significantly reduced the accumulated losses and reduced borrowings, I believe that under your leadership we should be able to receive dividends in the next couple of years.”

In response to the comments, Chairman Dangote Flour Mills, Mr. Asue Ighodalo further elaborated on the company’s performance in the 15 month period under review.

He said “Despite the tough business environment, I am delighted to announce that your company delivered impressive results.

“Our turnover during the period was N105.7 billion, representing an increase of 120.2 percent above the N48.0 billion recorded in the 2015 financial year.

Gross Profit improved by 556 percent during the period, rising to N29.3 billion from N4.4 billion in the prior period.”

As a result, the company effected a complete turnaround on its bottom line, recording a profit after tax of N10.6 billion compared with a loss of N12.7 billion in the prior year.

On the inability to pay dividends, Ighodalo said “Despite the good performance of our company in the current financial year, the directors are unable to recommend a dividend payment.

“You will recall that the company recorded continued losses in the preceding four years, as a result of which accumulated losses stood at N23.1 billion as at 30 September 2015.

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.”

Ighodalo however assured shareholders that the Board will continue to focus on sustaining high product quality, improving customer engagement strategies and strengthening supply chain capabilities.

“We will continue to work extremely hard to enhance the value of your investment in our company. With your unalloyed support, we look forward to consolidating on these gains in the coming year.”