Honeywell Flour Mills improves pre-profit by 6%

Honeywell Flour Mills Plc. grew its  gross profit margin by 7 per cent from N3, 193 to N3.41 billion in the first quarter ended June 30, 2019.

The financial result of the company released recently showed that its operating profit increased by 52 per cent from N1.02 billion to N1.54 billion.

The revenue moved up 7 per cent to N19 billion, compared with N17.7 billion recorded in the corresponding quarter of 2018, underpinned on sales of various Pasta products, which led to the continued strong performance of its B2C business line.

The commencement of full commercial production at our ultra-modern Foods and Agro-allied complex in Sagamu, Ogun State positively impacted on the country’s performance during this period.

Speaking on the company’s performance, the Managing Director, ‘Lanre Jaiyeola, noted that, “we were able to grow our capacity to meet the increasing demand for our Pasta products which is evidenced by the impressive 157 per cent volume increase. The performance in Pasta gives credence to the company’s commitment to continue to expand its footprint into growth areas that will positively impact the long-term sustainability of the business.”

 He explained that, “Execution of well-embedded savings and efficiency initiatives aimed at improving the company’s margins led to a 14 per cent drop in selling and administration expenses from N2.2 billion to N1.9 billion. This translated to the operating profit accelerating at a faster rate than revenue by 52 per cent, from N1.02 billion to N1.54 billion.”

Honeywell’s revenue was however moderated by increase in finance expense which was up by 58 per cent from N892 million in the corresponding quarter of the last financial year to N1.4b. “The growth in finance expense was as a result of the cost of financing the Foods and Agro-allied complex which is now being recognised in the income statement following the commencement of commercial operations. As a result, profit for the period only increased by 6 per cent from N102m to N108m,” he stressed.

Jaiyeola expressed Confidence of sustaining an improved performance through the remaining period of the financial year and the future, saying “We are confident about the future and our performance for the full year. We will continue to execute on our five core strategic pillars through three key drivers of growth, efficiency and capability. We will also strengthen and expand our business portfolio, generate additional revenue streams by offering new products tailored to consumers’ taste and nutritional needs and we will drive margin improvement by enhancing operational efficiency and developing capabilities to extend product offerings and serve new markets.”