Honeywell Flour Mills Plc (HFMP) in its audited results for the year ended March 31, 2017, released to the Nigerian Stock Exchange declared N8.8 billion profit for the period.
The profit fro the 2017, indicated a decrease of 63 per cent when compared with N14.4 billion reported for the same period of 2016.
The group’s pre-tax profit for the year ended March 31, 2017, stood at N10.5 billion in contrast to N11.5 billion a year ago, on rising finance costs which increased 45 per cent to N32.5 billion from N22.4 billion recorded for the year ended March 2016.
The group’s finance costs spiked on account of high interest on bank loans and overdrafts, which settled at N29.0 billion, as against N21.2b, an increase of 35 per cent.
During the reporting period, the Company posted revenues of N53.2 billion, up by about five per cent from N50.9 billion recorded a year ago. This increase in turnover was achieved despite the general squeeze on consumer spend due to macroeconomic headwinds experienced nationwide in 2016.
A statement from the Company’s Management indicated that they implemented forward looking strategies aimed at input cost management and efficiencies in the overall supply chain management process.
As a result of this, cost of sales declined by 13 percent to N40.5 billion compared to N46.5 billion recorded in the previous year. A combination of increased turnover and reduced cost of sales resulted in a 191 percent increase in gross profit to N12.7 billion, for the period.
Emerging from a difficult period in full year 2016, HFMP’s operating profit grew to N8.3 billion following Management’s execution of tactical initiatives in the company’s supply chain, sales and marketing functions to improve cost-to-serve metrics across modern trade and informal market channels in all business segments of the Company. This resulted in the 23 percent reduction recorded in Selling and Distribution costs in full year 2017.
There was a significant increase in net finance costs borne by HFMP in the period amounting to about N2.0 billion when compared to the previous period. This was reflective of the increased cost of doing business in an environment characterised by uncertainty and more conservative banking industry.
Overall, the company recorded a profit before tax of about N5.5 billion, a swift recovery from the loss of N2.8 billion recorded in full year 2016.
Commenting on the results, the Managing Director, Mr ‘Lanre Jaiyeola, said: “These results were achieved as a result of our determination to exceed the expectations of all stakeholders.
Despite a challenging environment, we focused on delivering superior quality products to our wide-ranging customers in the retail and wholesale segments whilst leveraging our route to market capabilities which we continue to invest in.