Honeywell Flour Mills Plc (HFMP) has announced its audited results for the year ended March 31, 2018. Revenue increased by 34% to N71.5 billion, versus the N53.2 billion recorded in the comparable prior year period. Given the increase in production activities and higher energy costs due to major disruptions in gas supplies, cost of sales grew by 37% to N55.4 billion.

The Company also reported a gross profit growth of 26% compared to the prior year period, from N12.7 billion to N16.1 billion while gross margin as a percentage of net sales was 22% for the period.

Selling & Distribution costs grew in line with increased volumes and reflected the increased costs associated with transporting finished goods out of its plant at the Tin Can-Island Port, Apapa where there has been a constant traffic gridlock for months as the Federal Government and several stakeholders embarked on palliative measures to fix the roads. The ongoing rehabilitation works on the Ijora axis of the Apapa road network has reached an advanced stage and the completion of this is expected to improve accessibility inbound and outbound Apapa; this will enhance better product delivery to its customers.

Profit after Tax grew by 3% from N4.3 billion in FY2017 to N4.4 billion in FY2018. The growth was primarily a result of a 15% increase in operating profit which grew from N8.3 billion to N9.5 billion and which was partially offset by interest expenses and taxation. Net finance costs increased from N3.7 billion to N4.6 billion during the reporting period.

Providing further clarification on the finance cost, the Company explained that the increase in finance cost was largely due to the increase in interest rates and to manage the cost of borrowing, the Company was able to structure a significant portion of the business financing through development banks at concessionary interest rates.  The benefit of this impacted the bottom line in the second half of the financial year and this benefit is expected to continue in the new financial year.

Commenting on the results, the company’s Managing Director: Mr. ‘Lanre Jaiyeola, said: “We started the year with a very strong momentum across our company and executed an aggressive market share recovery drive resulting in the 34% top line growth being reported today. We saw very strong demand for our portfolio of brands even though the consumers’ purchasing power is yet to return to pre-recession levels. We remain steadfast in our commitment to ensure affordability and availability of nutritious food in Nigeria and we assure our shareholders of sustainable profitable returns in the future.”