Honeywell Flour Mills declares N143m loss in nine months

Honeywell Flour Mills Plc. (HFMP) has announced nine month unaudited results for nine months ended December 31, 2019, with profit reduced by 747 per cent from N143million to a loss of N925million.

The company’s unaudited results for the nine-month period ended 31st December 2019 shows revenue growth of six per cent from N55billion to N58.2billion when compared with the same period in 2018.

The growth in revenue was driven by a corresponding growth in sales volume by five per cent. Efficient management of input costs and operating expenses also led to a healthy gross margin of 17.6per cent and 9-months operating profit increasing by 19per cent from N2.8billion to N3.4billion.

Honeywell Flour Mills, Managing Director, Lanre Jaiyeola said, “Despite the challenging operating environment occasioned by rising input costs, reducing spending power of consumers and product evacuation challenges due to the traffic logjam at Apapa, the company grew its 9 months revenue by six per cent to N58.2billion, when compared to the revenue of N55billion recorded in the corresponding period of the last financial year. This was driven by sales of our various Flour and Pasta products.

The Managing Director further explained details of the result, In line with our objective to continuously improve operational efficiency, the execution of well–embedded operational efficiency initiatives led to 9-month operating profit accelerating at a faster rate than revenue by 19per cent from N2.8billion to N3.4billion. We will continue to improve our operational efficiency in order to maximize value to shareholders.

The growth in operational efficiency was however moderated by the increase in finance expense which was up by 60per cent from N2.6billion in the corresponding period last financial year to N4.2billion.

The increase in finance expense was as a result of the cost of the financing part of the Foods and Agro-allied complex which is now being charged into the Income Statement following the commencement of commercial operations.