Operating Results and Performance
The Company achieved strong volume and value growth compared with the previous year despite the difficult operating environment characterised by increased competition and an influx of substitute propositions. As a result, Turnover increased by 35% from N199.5 billion in 2020 to N268.4 billion in 2021. Operating profit increased by 13% from N19.4 Billion in 2020 to N22 Billion in 2021. High Finance costs due to the Naira devaluation led to a decline in Profit Before Tax (PBT) by 15% from N14.9 billion in 2020 to N12.7 billion in 2021.
Ben Langat, Managing Director of FrieslandCampina WAMCO Nigeria PLC and Sub-Sahara Africa Cluster, explained: “In the year under review, we made excellent progress in strengthening our business strategies.
We scaled up investments in brands and optimized physical availability. The combination of solid brands, operational excellence and expanded route-to-market (RTM) distribution strategy sustained our leadership position and delivered significant top-line growth.
Likewise, our sustainable Dairy Development received a boost through significant initiatives including collaboration on the Value4Dairy Consortium, investment in a new mobile yoghurt factory to scale up fresh milk processing, and expansion to new states; all modelled towards delivering and accelerating backward integration of the dairy sector in Nigeria.”
In accordance with the company’s dividend policy, the Board of Directors proposed a total dividend of N5.83 per N0.50 ordinary share. An interim dividend of N1.10 was paid in 2021, and a final cash dividend of N4.23per N0.50 share was approved by the shareholders at the Annual General Meeting plus a bonus share to be issued to existing shareholders on a one-for-one basis i.e., one ordinary share with a nominal value of N0.50 for each share owned.
According to Mr Moyo Ajekigbe, OFR, Chairman, Board of Directors, “Our achievements in 2021 were the result of concerted efforts by various stakeholders, and I would like to express my appreciation to them for their valued contributions.
The Board recognises the formidable leadership, resilience and professionalism of the Management Team, which delivered the strong performance recorded in 2021; and our greatly valued employees at all levels for their hard work, dedication and continued commitment. Despite the severe headwinds in our business environment, our Company was able to sustainably grow the business across the board.”
2022 Company Outlook
The country’s GDP is expected to grow by 3-4%; however, the outlook remains clouded by uncertainty surrounding oil price trajectory, scarcity of FX, rising inflation, high unemployment, security challenges and social tensions across the country. Both the supply and demand sides of our business would be under immense pressure.
The expected volatility and uncertainty in the business environment notwithstanding, the Board and Management remain confident about the future of the Company and are committed to its success and sustainability. We are confident that the Company’s brands, which are leaders in the dairy sector, will continue to leverage our optimised route-to-market.
We will continue to aggressively pursue our backward integration and product diversification strategies with vigour to ensure the long-term sustainability of our business.