FrieslandCampina WAMCO reports increased profits

By Jim Cornall

- Last updated on GMT

FrieslandCampina WAMCO is optimistic about the coming year in spite of economic challenges.
FrieslandCampina WAMCO is optimistic about the coming year in spite of economic challenges.

Related tags Milk price increase Economics

At the 44th AGM of FrieslandCampina WAMCO Nigeria PLC, held in Lagos recently, shareholders unanimously approved its annual report and accounts, which showed an increase in turnover compared to the previous year, despite the decline in economic activities and increased pressure on the naira currency.

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.

Left to right: Ben Lagat, managing director, FrieslandCampina WAMCO Nigeria PLC; Roel van Neerbos , chief operating officer, CPEMEA Royal FrieslandCampina; Jacobs Ajekigbe , chairman, FrieslandCampina WAMCO Nigeria PLC; Frans Keurentjes, chairman, supervisory board, Royal FrieslandCampina; at the 44th AGM of FrieslandCampina WAMCO Nigeria PLC held on May 18, 2017, in Lagos.

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.

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