In its financial year for the period ended March 31, 2022, Honeywell Flour mills have announced an N983.8million loss, representing a 188 per cent decline from N1.13billion profit reported in the full year ended March 31, 2021.
In its profit & loss figures, the Flour processing company on the Nigerian Exchange Limited (NGX) yesterday 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 a 32.9 per cent hike in the cost of sales to N124.86billion in 2022 from N93.97billion in 2021.
The audited results revealed a 34.8percent increase in Honeywell Flour mills’ 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 Mill’s three operational factories in Apapa, Ikeja and Sagamu.
Apapa factory’s sales cost rose by 36.3 per cent to N99.56billion in 2022 from N73.02billion in 2021, while the 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.
In addition, the company factory in Sagamu reported a 14.6 per cent increase in the 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, a 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 an increase in the 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, costs 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 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 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.
