Turnover increased by 2.5% from N120.72bn ($380m) in 2015 to N123.75bn ($391m) in 2016. Profit Before Tax (PBT) however increased by 7.2% to N19.96bn ($63m) as a result of the impact of the modest growth in turnover and “significant reduction” in administrative costs.
Sector improvement
The company said it held its position in the market during the year by improving distribution with an extensive distribution network and coverage of sales outlets, while reinforcing a collaborative exchange with distributors.
It created indirect employment for almost 1,400 people via its route to market expansion, and noted a source of sustained income for 2,000 farmers was provided in 2016 through the company’s development of the Nigerian dairy sector.
One focus for FrieslandCampina WAMCO during the year was to improve on the quality of raw milk obtained from local suppliers, which it said was achieved by putting in place a quality improvement program.
The program involved extensive training of the Fulani milk producers at the herd levels on how to hygienically handle and deliver raw milk to collection centers.
Outlook for 2017
The country's real GDP growth is expected to rebound slightly, by about 0.8%, in 2017; although inflation is expected to increase marginally.
The Nigerian Government is expected to adopt measures such as increased capital expenditure and increased funding of the foreign exchange market to pull the economy out of recession, but the FMCG market will continue to come under pressure.
While significant foreign exchange constraints, high inflation, milk price increase and low consumer purchasing power are likely to negatively impact sales and profitability in 2017, the company said it is confident it will continue to utilize resources efficiently and manage volumes and margins to ensure a long term sustainable position.