In its latest 9-months ended December 2021, Honeywell Flour Mills Plc has shown how the firm is counting on affordability and quality of its products to sustain growth as the firm recorded a 21.6 percent growth in revenue from N82.13 billion to N99.88 billion in the current period.
Findings from the firm’s latest financial statement showed the Company’s business operation segments are identified by three factory locations at Apapa, Ikeja, and Sagamu. The Apapa factory manufactures flour, semolina, wheatmeal, and brown flour while the Ikeja and Sagamu factories manufacture noodles and Pasta, respectively.
Based on the above information, the Apapa factory recorded more sales than the other factories, raking in N78.75 billion, while Ikeja and Sagamu factories generated N5.54 billion and N15.59 billion, respectively.
Further findings showed the firm’s selling and administrative expenses declined by 23.21percent from N7.11 billion a year earlier to N5.46 billion in the 9month period while Finance income stood at N604 million during the period.
Operating profit depreciated by 14.62percent from N5.23 billion to N4.48 billion while Tax expense amounted to approximately N497 million in the period under review, as contained in the financial statement.
The company’s net assets decreased by N435 million from N57.97 billion recorded as at March 2021 to N57.53 billion in the period under review. However, Total assets stood at N141 billion.
Read also: Flour Mills: Q3 financials shows robust growth
Last November, Flour Mills announced it had reached a deal to acquire the flour mills business of Honeywell in an N80 billion deal that will significantly enhance its market leadership.
FMN is believed to hold about 40 percent of the flour business in Nigeria and its leadership in the sector will become even more secure following the combination with Honeywell Flour, which has a production capacity of 835,000 metric tons of food per annum.
BusinessDay learns that the deal has been helped by several factors including the fact that the combination is seen as a “strategic fit” and also the leaders of the two businesses including their chairmen have known each other for a very long time. They have mutual respect for each other.
In the full year ended March 2021, the turnover for the two was N771.6 billion for Flour Mills and N109.59 billion for Honeywell Flour, and the combination will see FMN emerge as a true continental giant, amassing substantial value for shareholders and huge economic benefit for Nigeria.
FMN, established in 1960, prides itself of being in the vanguard of feeding the nation for the past 60 years. Stakeholders would benefit from the more than 85-year combined track record of FMN and HFMP and their shared goal of making affordable and nutritious food available to Nigeria’s population.
The complementary transaction combines FMN’s market-leading offerings that include grain-based foods, sugar, starches, oils, spreads and breakfast cereals with HFMP’s market-leading diverse and differentiated range of carbohydrate products.
Under the deal, Honeywell Group will dispose of a 71.69 percent stake in its flour business to FMN based on an enterprise value of N80 billion and subject to approval from the appropriate regulators.
