Honeywell Flour Mills Plc recorded modest growths across key performance indicators in the first three months of its current business year, putting the flour-milling company on a good start to surpass its previous performance.
Key extracts of the interim report and accounts for the first quarter ended June 30, 2019 showed that turnover rose by 7.0 per cent to N19 billion by June 2019 as against N17.7 billion recorded in the corresponding period of 2018. Operating profit increased by 52 per cent from N1.02 billion to N1.54 billion. Profit before tax rose from N127.56 million to N134.87 million. Net profit after tax improved by 6.0 per cent from N102.3 million in June 2018 to N107.9 million by June 2019. Earnings per share consequently improved from 1.29 kobo in 2018 to 1.36 kobo in 2019.
Managing Director, Honeywell Flour Mills Plc, ‘Lanre Jaiyeola, said the improvement in the top-line was driven by sales of various pasta products, which led to the continued strong performance of our business-to-customer business line.
He noted that with the commencement of full commercial production at the company’s ultra-modern foods and agro-allied complex in Sagamu, Ogun State, the company was able to grow its capacity to meet the increasing demand for its pasta products as evidenced by the impressive 157 per cent volume increase.
According to him, 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.
He added that execution of well-embedded savings and efficiency initiatives aimed at improving the company’s margins led to a 14 per cent 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 per cent, from N1.02 billion to N1.54 billion.
He, however, noted that the growth in operating profit was moderated by increase in finance expense which rose by 58 per cent from N892 million to N1.4 billion.
He explained that 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.
