Nadaleen Singh

Al­though the for­eign ex­change sup­ply con­tin­ues to be a chal­lenge for Na­tion­al Flour Mills (NFM) the com­pa­ny re­port­ed net prof­it af­ter tax of $21.2 mil­lion for the six months end­ed June 30. This is a three per cent in­crease over the cor­re­spond­ing pe­ri­od in 2015.

Chair­man Nigel Ro­mano said the com­pa­ny achieved an in­crease in prof­it "de­spite a three per cent de­cline in rev­enue, in­dica­tive of the con­tin­ued con­trac­tion of de­mand in the lo­cal econ­o­my."

The com­pa­ny moved from a loss-mak­ing cash po­si­tion in June 2015 to earn $124.5 mil­lion in cash and cash equiv­a­lents this year. To­tal as­sets in­creased from $379.2 mil­lion in June 2015 to $470.2 mil­lion.

Ro­mano said the com­pa­ny's gross prof­it po­si­tion im­proved for 2016.

"Cost con­tain­ment mea­sures, in­clud­ing man­age­ment of the mix of raw ma­te­ri­als and in­sur­ance pre­mi­ums which favourably im­pact­ed cost of sales, re­sult­ed in a 22 per cent im­prove­ment in gross prof­it," he said.

How­ev­er, NFM's ad­min­is­tra­tive ex­pens­es in­creased by 17 per cent "due to sys­tem and process up­grades amid at in­creas­ing pro­duc­tiv­i­ty and im­prov­ing in­ven­to­ry man­age­ment."

The sup­ply of for­eign ex­change and de­pre­ci­at­ing rate are two main chal­lenges for the com­pa­ny, Ro­mano said, as it us­es for­eign cur­ren­cy to pur­chase raw ma­te­ri­als and to set­tle for­eign sup­pli­er com­mit­ments.

"For­eign cur­ren­cy avail­abil­i­ty, cou­pled with the cost im­pli­ca­tions of the de­te­ri­o­rat­ing ex­change rate, rep­re­sents the sin­gle great­est chal­lenge to our pos­i­tive out­look for 2016, al­ways keep­ing in mind the goal of de­liv­er­ing val­ue for our clients, se­cu­ri­ty for our work­force and sus­tain­able prof­itabil­i­ty for our in­vestors," he said.

Pri­or­i­ty ar­eas for the com­pa­ny in­clude look­ing at growth in re­gion­al and ex­tra-re­gion­al mar­kets and mov­ing to­ward more lo­cal con­tent as it seeks to in­crease sales rev­enues and mit­i­gate its for­eign ex­change chal­lenges, the chair­man said.