Oman Flour Mills Company's net profit declined by 59 per cent for the three months ended September 30, 2011, according to company's filing on Muscat Securities Market (MSM) on Monday. The company's net profit declined to RO658,000 compared to net profit of RO1.62mn in the same quarter of the previous year.
Manal Mohammad al Abdwani, chairperson of Oman Flour Mills, attributed the decline in net profit to government's restriction on increase of feed prices and absence of subsidy.
"The restriction by the government to allow us to increase feed prices has affected our profitability of the feed mill," said Abdwani. "The feed mill is incurring losses and this in turn has reduced the overall profitability of the company and the group. "We are still awaiting the government's approval for subsidy on feed products. Should the subsidy come into force the feed mill will become profitable."
However, the company's sales volume increased by 22 per cent in the three months period. Total revenue increased by 34 per cent to RO14.27mn from RO10.62mn in the same period of last year. But the cost of sale, which increased by 48 per cent to RO12.87mn due to higher commodity prices, eroded its profit. The profit margin dropped to 4.61 per cent from 15.25 per cent in the same period last year.
Abdwani added that the construction of an industrial bakery is under way and commercial production is expected by early December 2011.
© Muscat Daily 2011
