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OFM commence trial bakery project on lower feed profitability

Published on 17 May, 2011, Last updated at 12:55 GMT
 

Muscat, Oman -- The Industrial Bakery project of Oman Flour Mills (OFM) will commence trial commercial production in September this year, according to Manal bint Mohammed al Abdwani, Chairperson of the partly government-owned company.

Construction work on the bakery — the first of its kind in the Sultanate — is currently under way with contractors currently focused on installing the requisite equipment and fittings, the Chairperson stated in the Director's Report on the company's financial performance for the nine months ending March 31, 2011.

Meanwhile, the OFM Group's net profit after tax for the nine months declined to RO 4.989 million against earnings of RO 8.584 million during the corresponding period of the previous year. The slump was largely attributable to the prevailing high cost of commodities.

"Wheat and other commodity prices continue to remain at high levels due to uncertainty in weather conditions and lower high quality wheat stocks. The weakening of the US dollar and increase in oil prices also had a negative impact on commodity prices, resulting in higher freight. We expect the prices to remain at these levels in the near future," the Chairperson stated.

The Group's flagship Oman Flour Mills reported a net profit after tax of RO 5.117 million as compared to earnings of RO 8.706 million during the previous year. In contrast, total sales climbed 5 per cent by volume during this period.

"The third quarter from January 1, 2011 to March 31, 2011, feed mill margins have fallen substantially due to significant increases in feed mill material prices over the last six months.

"Also, due to the uncertainty in the region, the MSM Index fell by 9 per cent in the last quarter resulting in a fall of our investment by RO 290K. The fall in investment income and substantial drop in feed profitability has resulted in lower profit in the third quarter," Al Abdwani added.

 

 
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