Northern Nigeria Flour Mills Plc (NNFM) has seen a considerable drop within the revenue it generates from its income.
The corporate’s 9-month outcomes for the interval ending December 2025 reveal a decline in gross revenue, working margins, and a loss after tax; marking the worst efficiency in 5 years.
Regardless of incomes N18.38 billion in income, NNFM was solely capable of retain N1.33 billion as gross revenue, N84 million as working revenue, and a lack of N144 million after tax.
These outcomes have left analysts questioning the corporate’s capability to regain its footing and whether or not it is going to be capable of keep its constant dividend funds.
For the previous 5 years, NNFM has been a dependable participant within the Nigerian inventory market, constantly paying dividends to its shareholders.
From N0.15 per share in 2021 to a excessive of N0.50 per share in 2024, traders have loved regular returns.
Nonetheless, the corporate now seems to be going through a tricky problem, and it appears unlikely to pay any dividends in 2026.
So, what’s going flawed?
The struggles at NNFM
NNFM’s 9-month outcomes ending December 31, 2025, inform a narrative of an organization that’s struggling to keep its footing.
- Income has fallen by virtually half in comparison with the identical interval in 2025, indicating that the corporate is promoting far much less than earlier than.
- On high of this, prices stay excessive, notably the price of uncooked supplies like wheat and maize, which NNFM makes use of to provide flour and semovita.
- These elevated prices have squeezed their earnings, leaving little room to cowl the fundamental bills, not to mention pay a dividend.
The impression of rising prices
The key concern going through NNFM in 2026 is the excessive price of gross sales. Within the first 9 months of the 2026 monetary yr (ending December 2025), gross revenue dropped to simply N1.33 billion, marking a 65% lower from the identical interval final yr.
- The gross revenue margin collapsed to simply 7%, in comparison with 13% in 9M 2025. Which means direct prices, primarily materials prices, consumed about 93% of income for the worst ratio in 5 years, and a scenario that could be unsustainable.
With this direct cost-to-revenue ratio, NNFM had little or no left to cowl its working bills, resulting in an working revenue of simply N84 million, down from over N4 billion in the identical interval final yr.
- This has contracted the working margin to 0.46%, the bottom in 5 years. Clearly, the firm is struggling to retain revenue from its gross sales.
Administration response: Can they flip issues round?
Administration has acknowledged that they’re working onerous to show the scenario round, specializing in slicing operational prices and enhancing gross sales.
Nonetheless, given the critical challenges NNFM faces with its excessive price of gross sales and shrinking margins, how efficient these efforts might be stays unsure.
Traders should wait and see how NNFM navigates these hurdles.
One attainable start line for enchancment could possibly be disclosing additional particulars concerning the elements of its materials prices.
For materials prices to eat over 85% of income requires additional scrutiny, and traders could anticipate extra transparency on this space.
NNFM is closely influenced by its guardian firm, Golden Penny Meals Ltd (previously Flour Mills of Nigeria Plc), which holds 59.6% of the corporate’s fairness, which was lately delisted from the NGX.
Its final controlling guardian is Excelsior Africa Investments Restricted; an organization registered in Liberia. The helpful proprietor of Excelsior Africa is a belief arrange by the late John S. Coumantaros.
Whereas NNFM’s guardian firm and final guardian maintain substantial management over its operations, this advanced possession construction is perhaps contributing to strategic choices that prioritize the pursuits of the bigger group, probably sidelining NNFM’s particular wants.
Backside line
The 9-month outcomes paint an image of an organization going by way of a tough section, with rising prices, shrinking margins, and a important decline in profitability.
This could make 2026 the worst yr for NNFM within the final 5 years, and consequently, the chance of NNFM paying a dividend in 2026 appears very low.
Traders might want to rigorously monitor how NNFM addresses these challenges shifting ahead.
Nonetheless, there’s a silver lining: robust money stream from working actions. The corporate’s money stream administration seems to be enhancing, which may present some much-needed liquidity to climate this tough interval.
Regardless of the monetary challenges, NNFM’s share worth this yr has remained flat year-to-date (YtD), following a powerful 92% YtD achieve in 2025.
The corporate nonetheless has a market capitalization of N15 billion, almost double its internet property of N9 billion, which means that whereas it’s struggling now, the market nonetheless sees potential for restoration.
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