Honeywell Flour Mills (HFMP) Plc, one of the leading food manufacturers in Nigeria, has reported a revenue of N58.230 billion for the nine months ended December 31, 2019. The results also showed a growth of six per cent from the N55.03 billion recorded in the corresponding period of 2018.
According to the company, the growth in revenue was driven by corresponding growth in sales volume by five per cent. Efficient management of input costs and operating expenses also led to a healthy gross margin of 17.6 per cent and operating profit increasing by 19 per cent from N2.8 billion to N3.4 billion.
However, an increase of about 60 per cent in finance expenses, which rose from N2.648 billion to N4,246 billion made the company to end the period with a loss of N925 million, compared with a profit after tax of N143 million recorded in 2018.
The company said 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.
Commenting on the results, Managing Director, HFMP, Lanre Jaiyeola, said: “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 grew its nine months revenue by six per cent to N58.2 billion, when compared to revenue of N55 billion recorded in the corresponding period of the last financial year. This was driven by sales of our various Flour and Pasta products.”
According to him, in line with their objective to continuously improve operational efficiency, the execution of well–embedded operational efficiency initiatives led to nine-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 maximize value to shareholders. We are confident that our performance in the coming quarter and the new financial year thereafter will record significant improvement. We have implemented strategies to maximize shipment of products to our customers in spite of the Apapa traffic 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,” he assured.