Honeywell Flour Mills Plc. (HFMP), a leading foods manufacturer in Nigeria, today announced financial figures for the 9-month period ended December 31, 2019.
Honeywell Flour Mills unaudited results for the nine-month period ended December 31, 2019 shows a revenue growth of six per cent from N55 billion to N58.2 billion when compared with the same period in 2018. The growth in revenue was driven by 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 17.6 per cent and 9-months operating profit increasing by 19 per centfrom N2.8 billion to N3.4 billion.
‘Lanre Jaiyeola, Managing Director commented: “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 N58.2 billion, when compared to revenue of N55 billion 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 saying in line with the company’s 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 19 per cent from N2.8 billion to N3.4 billion.
“We will continue to improve our operational efficiency in order to maximise value to shareholders.
“The growth in operational efficiency was however moderated by the increase in finance expense which was up by 60 per cent from N2.6 billion in the corresponding period last financial year to N4.2 billion. The increase in finance expense was as a result of the cost of financing part of the Foods and Agro-allied complex which is now being charged into the Income Statement following the commencement of commercial operations. As a result, profit for the 9-month period reduced by 747 per cent from N143 million to a loss of N925 million.
In conclusion, the Managing Director said “We are confident that our performance in the coming quarter and the new financial year thereafter will record significant improvement. We have implemented strategies to maximise shipment of products to our customers in spite of the Apapa traffic gridlock.
“We are also well positioned to substantially increase our capacity utilisation of the Pasta production through continuous flow of input materials to the Pasta factory in Sagamu. We are also working on the introduction of new products tailored towards the preference of our most valued consumers in terms of satisfying their nutritional needs, taste and spending power.”