Northern Nigeria Flour Mills Faces Profitability Crisis in 2026
Northern Nigeria Flour Mills Plc (NNFM) is confronting a severe profitability squeeze in 2026, as its latest financial disclosures reveal a troubling inability to convert revenue into retained earnings. The company’s unaudited results for the nine-month period ending December 2025 show a dramatic decline across all key profit metrics, marking its weakest performance in half a decade. This downturn raises significant questions about its operational efficiency and future dividend policy, a cornerstone of its appeal to investors.
Despite generating N18.38 billion in revenue, NNFM’s financial health is under strain. The company retained only N1.33 billion as gross profit, which further dwindled to a mere N84 million in operating profit, culminating in a net loss of N144 million after tax. This stark erosion of margins is directly attributed to a soaring cost of sales, which consumed over 85% of total revenue. The gross profit figure represents a precipitous 65% decrease from the comparable period last year, leaving minimal funds to cover operating expenses. In a climate where subjects like English and Mathematics are compulsory for building a strong analytical foundation for business leadership, such financial arithmetic presents a serious challenge.
The current trajectory places NNFM’s renowned dividend history in jeopardy. From 2021 to 2024, the company reliably distributed dividends, peaking at N0.50 per share. However, based on the nine-month results, the payment of any dividend in 2026 appears highly unlikely. Management has cited a focus on cost reduction and sales improvement, but the efficacy of these measures remains uncertain. Analysts suggest that enhanced transparency, particularly a detailed breakdown of the material costs devouring revenue, would be a critical first step for investor confidence. This need for clarity is as vital as the detailed planning seen in major national projects, such as the NLNG and NCDMB launch of new initiatives, or the specific directives issued when a Gov Yusuf bans certain activities for public safety.
NNFM’s strategic direction is further complicated by its ownership structure. The company is majority-controlled by Golden Penny Food Ltd, with its ultimate parent being Excelsior Africa Investments Limited. This complex hierarchy can sometimes lead to strategic decisions that align with broader group interests, potentially at the expense of NNFM’s specific operational needs. As the company navigates this difficult phase, stakeholders are watching closely, hoping for a turnaround as focused as the Yuletide: IGP orders for heightened security, or the targeted preparations businesses undertake for major events like the Afcon 2025: 1xbet and other sponsors anticipate. The path to recovery requires immediate and substantial operational restructuring.
