Honeywell Flour Mills Plc (HFMP) recorded a revenue growth of 6 per cent in nine-month period, from N55 billion to N58.2 billion, when compared with the same period in 2018.
According to the company, the growth in revenue was driven by corresponding growth in sales volume by 5 per cent while efficient management of input costs and operating expenses also led to a healthy gross margin of 17.6 per cent and 9-month (9M) operating profit increasing by 19 per cent from N2.8 billion to N3.4 billion.
Commenting on the results, its Managing Director, Lanre Jaiyeola, noted that 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’s increased revenue was driven by sales of its various flour and pasta products.
He said: “In line with our 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.”
Jaiyeola, thereafter, expressed confidence that the company would record significant improvement in the coming quarter and the new financial year.
“We have implemented strategies to maximise shipment of products to our customers despite the Apapa 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,” Jaiyeola said.