Honeywell grows 4% revenue to N74.4 billion

Honeywell Flour Mills Plc (HFMP), a leading foods manufacturer in Nigeria, has grown its revenue by 4 per cent to N74.4 billion recording its largest revenue figures since inception.

The company’s audited results for the year ended March 31, 2019, showed a Gross Profit Margin (GPM) of 15 per cent, while operating profit reduced by 58.7 per cent to N3.9 billion just as total assets increased by 10 per cent to N137.5 billion.

According to the company’s Managing Director, Lanre Jaiyeola, despite the humongous challenges which includes operating in the gridlock-prone and pothole-ridden Tin Can Island, Apapa, Honeywell’s 2019 year-end results show a 4 per cent growth in revenue to N74.4 billion from the N71.5 billion recorded in the previous years.

“The growth in sales volume and revenue is testament to the strength of our brands portfolio even in a difficult operating environment. Due to higher input costs, particularly cost of purchasing wheat and cost of sales increased by 13.5 per cent to N62.9 billion.

“Consequently, gross profit declined by 28.3 per cent from N16.05 billion to N11.5 billion, as the increase brought about by higher input costs could not be passed onto the customer. He explained that selling and distribution costs also grew at a higher rate than sales volumes and reflected the increased costs associated with evacuating finished products out of its flour milling plant at the Tin-Can Island Port, Apapa where the traffic gridlock has now persisted for over a year,” he said.

He continued: “In line with our strategy to continuously improve operational efficiency and effectiveness, we reduced net finance costs by 28 per cent from N4.6 billion to N3.3 billion during the period under review. “The significant reduction in the finance costs was as a result of the restructuring exercise we initiated in FY’18 to manage the cost of borrowing by replacing a significant portion of our loans with financing from development banks at concessionary interest rates.

“Honeywell Flour Mills Plc remains focused on creating value for our stakeholders particularly consumers, customers, employees and shareholders. We are well placed to continue to provide our highly valued consumers safe, nutritious and affordable food products and also capture previously un-served markets.”

Honeywell commenced commercial operations from its new ultra-modern pasta plant at its Sagamu factory during the financial year. Management expects that concentrating pasta production in one location and sales of the increased volumes of pasta will boost revenues of the business, thereby improving the operating profit in the coming years.