Monday , September 26 2022
Honeywell Flour Mills Profit Falls by 188% in One Year

Honeywell Flour Mills Profit Falls by 188% in One Year

…Reports N983.8 Million Loss

Honeywell Flour mills in its financial year for the period ended March 31, 2022 has announced N983.8million loss, representing a 188per cent decline from N1.13billion profit reported in the full year ended March 31, 2021.

The Flour processing company on the Nigerian Exchange Limited (NGX) yesterday in its profit & loss figures also announced N172.14million loss before tax in 2022 from N1.58billion profit before tax reported in 2021.

The losses reported by Honeywell Flour mills can be attributable to 32.9per cent hike in cost of sales to N124.86billion in 2022 from N93.97billion in 2021.

The audited results revealed a 34.8per cent increase in Honeywell Flour mills’s raw and packaging materials consumed to N111.44billion in 2022 compared with N82.66billion in 2021 and it contributed 89.3per cent of the overall cost of sales in the year under review.

Cost of sales witnessed an increase at Honeywell Flour Mills three operational factories in Apapa, Ikeja and Sagamu.

Cost of sales in Apapa factory rose by 36.3 per cent to N99.56billion in 2022 from N73.02billion in 2021, while Ikeja factory witnessed a significant increase of about 49 per cent in its cost of sales to N6.99billion in 2022 from N4.7billion in 2021.

Read More: Flour Mills of Nigeria Acquires Majority Stakes in Honeywell Flour Mills

In addition, the company factory in Sagamu reported a 14.6 per cent increase in cost of sales to N18.3billion in 2022 from N15.98billion in 2021.

However, the company closed the 2022 financial year with N136.43billion revenue, 24 per cent increase from N109.59billion in 2021, driven by revenue generated from the company’s factory in Apapa.

Revenue generated at the company’s Apapa operational factory rose by 28 per cent to N108.8billion in 2022 from N85.02billion in 2021.

The Ikeja segment manufactures paste/noodles and the Sagamu segment manufactures Paste, while Apapa segment manufactures Flour, Semo, Wheat mean, Brown flour and Baker’s delight flour.

On the backdrop of increase in cost of sales, the company’s gross profit dropped by 25.9 per cent to N11.57billion in 2022 FY from N15.62billion in 2021 FY.

Although the management was prudent in its total operating expenses and finance cost as both dropped by 11 per cent and 9.6 per cent, respectively.

The board at the meeting recently resolved to recommend the cancellation of its unissued shares to the shareholders at the next Annual General Meeting in compliance with the provisions of CAMA 2022 and the public notice of the Corporate Affairs Commission dated April 16, 2021.

While commenting on the company’s full year 2021 financial year, the Managing Director, Honeywell Flour Mills, Lanre Jaiyeola, said: “We worked collaboratively towards the execution of our goals; improved production and cost optimisation, guided by a clear strategy and common purpose.

“We remain committed to ensuring the supply of affordable nutritious food products to Nigerians, and we continue to assure our shareholders of long-term profitable returns from Honeywell Flour Mills.”

The company had maintained that the future of its business would be shaped by a continued investment in innovative product development, advanced technology infrastructure and operational efficiency.

Meanwhile, the stock price of Honeywell Flour Mills depreciated by N0.22 or 6.29 per cent to close yesterday at N3.28 from N3.50 from it closed for trading last week.

About Bukola Olanrewaju

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