The new state-of-the-art pasta factory at Flowergate Industrial Estate, Sagamu, Ogun State.

Honeywell Flour Mills Plc. (HFMP), a leading foods manufacturer in Nigeria, has released its audited results for the year ended March 31, 2019, recording its largest revenue figures since inception. 

Full Year 2019 Financial Highlights

Revenue: increased by 4% to N74.4 billion

Gross Profit Margin of 15%

Operating Profit: reduced by 58.7% to N3.9 billion

Total Assets: increased by 10% to N137.5 billion

Key Operational Highlight

The Company 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.

‘Lanre Jayeola, Managing Director comments “Despite the humongous challenges operating out of our flour mill in Tin Can Island, Apapa, our 2019 year end results shows a 4% growth in revenue to N74.4 billion from the N71.5 billion recorded in the previous year which is an all-time high for the company. 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, cost of sales increased by 13.5% to N62.9 billion. Consequently, gross profit declined by 28.3% from N16.05 billion to N11.5 billion as the increase brought about by higher input costs could not be passed onto the customer. 

“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 located within the Tin-Can Island Port, Apapa where the traffic gridlock has now persisted for over a year. In line with our strategy to continuously improve operational efficiency and effectiveness, we reduced net finance costs by 28% 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 unserved markets.