Honeywell Flour Mills records improved earnings and profit in Q1 results

Honeywell Flour Mills Plc. (HFMP), a leading foods manufacturer in Nigeria, has announced the financial figures for the first quarter ended June 30, 2019. According to a statement from the company, the revenue moved up 7% to N19 billion, compared with N17.7 billion recorded in the corresponding quarter of 2018.

Also, the gross profit margin increased by 7% from N3, 193 to N3, 411 while the operating profit increased by 52% from N1.02 billion to N1.54 billion. Profit for the period under review also moved up by 6% from N102 million to N108 million.

Speaking on the company’s performance, the Managing Director, ‘Lanre Jaiyeola, noted that, “Despite the tough operating environment, revenue for the quarter was up by 7% 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% 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 further explained that, “Execution of well-embedded savings and efficiency initiatives aimed at improving the company’s margins led to a 14% 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%, from N1.02 billion to N1.54 billion.

The growth in operating profit he further explained, “was however moderated by increase in finance expense which was up by 58% from N892m 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% from N102m to N108m.

Confident of sustaining an improved performance through the remaining period of the financial year and the future, the Managing Director held that, “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 (3) 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.”