Honeywell Flour Mills reports 66.27% decline in full year profit

Honeywell Flour Mills plc has released its audited full year financial results for the period ended March 31, 2015.

The company’s result at the Nigerian Stock Exchange (NSE) shows revenue declined by N6.03billion or 10.95% to N49.05billion, from N55.08billion in the preceding year.

Honeywell Flour Mills plc is a member of the Honeywell Group.

It produces a range of high quality food products including flour, macaroni, spaghetti, noodles, wheat meal and semolina that meet the daily nutritional requirements of Nigeria’s growing population.

The administrative expenses of Honeywell Flour Mills plc rose from N1.79billion in 2014 to N1.85billion in the full year 2015 under review.

In a release preceding the results, Honeywell Flour Mills plc said the pressure experienced in the top line figure reflects the intense competition around price war going on in the industry and the falling naira.

Honeywell Flour Mills recorded 66.27% or N2.81billion decline in Profit before Tax (PBT), from N4.24billion to N1.43billion; while its profit for the year after taxation was down by 66.57% or N2.23billion, from N3.35billion in 2014 to N1.12billion.

The company’s earnings per share (EPS) dropped to 14.13kobo from a high of 42.26kobo in 2014.

Lanre Jaiyeola, managing director, Honeywell Flour Mills plc in a statement lamented the economic loss arising from the falling Naira, the perennial chaotic traffic and debilitating condition of the roads leading in and out of Apapa.

The company statement attributed the challenging results to several factors including the Apapa traffic gridlock and declining infrastructure around the ports.

“Roads leading to and from Apapa have effectively become car parks. Truck parking facilities around the ports that should have been completed years ago seem to have become abandoned projects. These problems have compromised our logistics efficiency by frustrating the prompt loading of products resulting in longer loading turnaround times and reduced stock turnover,” the statement reads.

According to Jaiyeola, “the company’s customers, suppliers, haulage partners and staff demonstrated great courage, loyalty and commitment during these challenging times. He noted that it takes, on an average, eight (8) hours for customers to access or exit the factory. Added to these, is a rise in dollar denominated input costs. Costs of wheat and spare parts have been rising because of the falling Naira to forex rates. These challenges coupled with weakening macro-economics of the country, means it takes much longer to factor such cost increments into product prices.”