A flour miller that delivered consistent dividends for five consecutive years has just filed its most challenging set of annual results, and the numbers reveal a business under significant structural strain.

Northern Nigeria Flour Mills Plc reported a pretax profit of ₦112.7 million for the financial year ended March 2026, a steep 96.09% decline from the ₦2.8 billion recorded in March 2025, pressured largely by weaker revenue performance and rising finance costs.

Profit after tax fell even more sharply, collapsing 98% to ₦25.6 million from ₦1.75 billion as raw material costs remained heavy, with inventory consumption standing at ₦17.9 billion, highlighting the capital-intensive nature of the milling business even in a weak sales year.

The revenue collapse is the headline driver of the deterioration. Revenue fell 39.1% to ₦21.55 billion from ₦35.39 billion in 2025, driven by a substantial contraction in product demand, lower sales volumes, pricing pressure, or a combination of all three. Operating profit dropped to ₦329.7 million from ₦2.89 billion, a decline of nearly 89%, indicating that core operations generated far less value than in the previous year.

The sharpest single blow came from one product segment. A closer review shows that maize sales collapsed from ₦10.2 billion to ₦2.2 billion, an effective evaporation of revenue from the company's most significant agricultural product line.

The pain had been visible for several quarters. By Q3 of its financial year, the period ended December 2025, NNFM had already slipped to a pre-tax loss of ₦584.87 million, a sharp reversal from a ₦2.31 billion profit in the same quarter a year earlier, with revenue down 48.8% to ₦4.33 billion. Management said at that stage it was actively implementing measures to return the business to profitability.

Despite the earnings devastation, the balance sheet held its shape. Total assets rose 41% year-on-year to ₦43.1 billion, while retained earnings edged higher to ₦4.48 billion, a resilience that reflects the company's debt-free position and positive working capital management even through the downturn.

Northern Nigeria Flour Mills began 2026 with a share price of ₦84.30 per share and closed its last trading day on May 26 at ₦79.40, losing 5.81% of its value year-to-date, giving it a market capitalisation of ₦14.1 billion, or approximately 0.0088% of the total NGX equity market.

The Kano-based miller is 59.6% owned by Golden Penny Foods Limited, formerly Flour Mills of Nigeria Plc, whose ultimate controlling parent is Excelsior Africa Investments Limited, a Liberia-registered company. Analysts have questioned whether this complex ownership structure is contributing to strategic decisions that prioritise the interests of the larger group, potentially sidelining NNFM's specific needs. Whether management's recovery measures can reverse the margin collapse before the next reporting cycle is the central question hanging over the stock.

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