Fan Milk Plc posts huge loss last year — Share price plummets, no dividend to shareholders
Despite the difficult year, the company still organized a number of promotional events to reward its distributors

Fan Milk Plc posts huge loss last year — Share price plummets, no dividend to shareholders

Fan Milk Plc Limited faced a difficult 2022 financial year as the company’s financials and share performance on the local bourse suffered significantly.

Advertisement

From a net loss position of GH¢13.4 million at the end of the year 2021, the company, once the toast in the market, posted another loss of GH¢41.6 million in the year under review.

The amount is thrice more than that of the previous year.

The price of the company’s shares also suffered a major hit after it fell on the Ghana Stock Exchange (GSE) at the end of last year.

It dropped by a whopping 25 per cent from GH¢4.00 in January 2022 to GH¢3.00 per share on December 31, 2022.

Dividend

As a result of the challenging financial position, the expectation of shareholders to have some dividend paid to them for their investment in the company was dashed as the directors failed to recommend any such payment for the year ended December 31, 2022.

Net assets

According to the company’s financial statement posted by the GSE, Fan Milk Plc at its 62nd Annual General Meeting also saw the net assets of the company decrease from GH¢ 246.7 million as at  December 31, 2021, to GH¢205.1 million as at  December 31, 2022.

Capital expenditure

During the year under review, the company also reduced its capital expenditure from the 2021 figure of GH¢47.19 million to just GH¢11.704 million.

The amount, which is also more than three times less than the previous, was spent on acquiring additional intangible assets and property, plant and equipment to support the company’s troubled operations.

Portfolio & product innovation

With regard to its portfolio and products innovation, the Managing Director of Fan Milk Ghana, Ziobeieton Yeo, in his annual report, said at the onset of the year 2022, “Our business was invigorated by our unwavering mission to promote good health through food, with a view to reaching as many individuals as possible.”

He said throughout the remaining months of the year, the company continued to strengthen its core pouch business while executing its flagship programme, the FanMilk Schools caravan, which had been dedicated to promoting healthy snacking and sanitation.

“This educational initiative reached 200,000 schoolchildren and resulted in the collection of one million plastic wrappers.

Customer service development

Mr Yeo said the company’s distribution network continued to serve as a critical component of its growth strategy, as it enabled it to fulfil its commitment to making its brands widely available throughout the country.

“Last year, we made significant investments in forging stronger partnerships to promote growth, and we continue to capitalise on our unique RTM, which is made up of 29 key distributors and over 800 agents.

“As a performance-oriented business, we incentivised 406 agents and key distributors (KDs) through the 2022 ‘Akyede Kese Reloaded’ Promo to encourage trade partners to increase sales while investing in their businesses.”

Operating and financial review

By way of financial review, Mr Yeo said Fan Milk Plc's financial results for the year ended December 31, 2022, showed a growth in revenue of about 15 per cent but noted that despite that achievement, the company posted a net loss of GH¢41.6 million.

Cash and cash equivalents declined from GH¢65.6 million in 2021 to GH¢61.3 million in 2022. The drop, Mr Yeo attributed to the operational loss recorded in the year.

By way of investment, he said the company continued to invest in its priority areas.

He said within the year under review, the company’s investment of GH¢11.7 million covered the biomass boiler, sales equipment and IT/IS infrastructure.

Optimism

Despite the serious challenges, Mr Yeo was optimistic about the future of the company and pledged the commitment of the company to continue working closely with local communities to create sustainable development projects that benefit all.

Advertisement

“ I would like to thank each one of you for your continued support of FanMilk,” he said, adding: “Together, we have achieved great success, and I have no doubt that we will continue to do so in the years to come. Let’s continue to innovate, grow and have some fun along the way.”

Connect With Us : 0242202447 | 0551484843 | 0266361755 | 059 199 7513 |

Like what you see?

Hit the buttons below to follow us, you won't regret it...

0
Shares