Honeywell Flour Posts Improved First Quarter Earnings and Profit

Honeywell Flour Mills(HFMP) Plc, has posted a growth of seven per cent in revenue to N19 billion in the first quarter ended June 30, 2019, from N17.7 billion in the corresponding period of 2018. Profit after tax rose by six per cent to N108 million, from N102 million.

Speaking on the results, the Managing Director of HFMP, Mr. ‘Lanre Jaiyeola, said: “Despite the tough operating environment, revenue for the quarter was up by seven per cent to N19 billion, when compared to revenue of N17.7 billion recorded in the corresponding quarter of the last financial year. This was driven by sales of our various Pasta products, which led to the continued strong performance of our B2C business line. With the commencement of full commercial production at our ultra-modern foods and agro-allied complex in Sagamu, Ogun State, 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.”

Jaiyeola 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. The growth in operating profit 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 N1.4 billion. 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 six per cent from N102 million to N108 million,” he said.