Honeywell Flour Targets More Revenue Streams to Boost FY Performance

By Modupe Gbadeyanka

Managing Director of Honeywell Flour Mills Plc, Mr ‘Lanre Jaiyeola, has disclosed that the leading foods manufacturer in Nigeria, would make efforts to deliver impressive results in the current financial year.

Mr Jaiyeola gave this assurance while commenting on the performance of the company in the first quarter of the year ended June 30, 2019.

According to the financial figures of the firm, the revenue moved up 7 percent to N19.0 billion, compared with N17.7 billion recorded in the corresponding quarter of 2018.

Also, the gross profit margin increased by 7 percent from N3,193 to N3,411 while the operating profit increased by 52 percent from N1.02 billion to N1.54 billion, with profit for the period under review also moving up by 6 percent from N102 million to N108 million.

In a statement issued by Honeywell Flour Mills, Mr Jaiyeola noted that, “Despite the tough operating environment, revenue for the quarter was up by 7 percent to N19 billion, when compared with revenue of N17.7 billion recorded in the corresponding quarter of the last financial year.

“This was driven by sales of our various Pasta products, which led to the continued strong performance of our B2C business line.

“With the commencement of full commercial production at our ultra-modern Foods and Agro-allied complex in Sagamu, Ogun State, we were able to grow our capacity to meet the increasing demand for our Pasta products which is evidenced by the impressive 157 percent volume increase.

“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.”

Mr Jaiyeola further explained that, “Execution of well-embedded savings and efficiency initiatives aimed at improving the company’s margins led to a 14 percent 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 percent, from N1.02 billion to N1.54 billion.

The growth in operating profit, he further explained, “was however moderated by increase in finance expense which was up by 58 percent from N892 million in the corresponding quarter of the last financial year to N1.4 billion.

“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. As a result, profit for the period only increased by 6 percent from N102 million to N108 million.

Confident of sustaining an improved performance through the remaining period of the financial year and the future, the Managing Director held that, “We are confident about the future and our performance for the full year.

“We will continue to execute on our five core strategic pillars through three key drivers of growth, efficiency and capability.

“We will also strengthen and expand our business portfolio, generate additional revenue streams by offering new products tailored to consumers’ taste and nutritional needs and we will drive margin improvement by enhancing operational efficiency and developing capabilities to extend product offerings and serve new markets.”