Honeywell Flour Mill, a listed miller involved in the processing and packaging of flour and livestock feeds from wheat, has recorded a 35 percent decline in its nine-month profit on rising sales costs.
The food maker’s profit plunged to N209 million in the nine-month period ended December 2021, compared to N323 million recorded in the previous year.
Shares of Honeywell closed 2.06 percent lower at N3.33 per share, Wednesday.
The miller’s revenue rose 21.5 percent to N99.8 billion in the nine-month period of 2021 compared to N82.1 billion in the same period of 2020.
However, sales cost rose 29 percent to N90.1 billion compared to N69.8 billion in the nine-month period of 2020.
The company’s gross margin, which shows the amount it retained per N100 revenue earned after deducting direct cost, fell to N10 in the nine-month period of 2021 compared to N15 the previous year.
Gross profit weakened 20.4 percent to N9.7 percent from 12.2 percent in the periods under review.
Read also: Five major takeaways from Honeywell latest financial result
Honeywell’s net profit margin also dipped to 21 percent in the nine-month period of 2021 compared to 39 percent the previous year.
Profit margin is the ratio of profit remaining from sales after all expenses have been paid.
Operating profit also plunged 14.5 percent to N4.48 billion in the nine-month period ended 2020 compared to N4.48 billion in 2020.
The company’s borrowing cost plunged 8 percent to N4.37 billion in the nine-month period of 2021 compared to N4.77 billion in 2020.
Finance income stood at N604 million in 2021 compared to 2020 when it made no income.
Net finance income jumped 381 percent to N607.4 million compared to N126.2 million in the full-year period of 2020.
The miller’s income from other sources rose 151 percent to N216 million compared to N86 million in the nine-month period of 2020.
The consumer goods firm saw its selling and distribution expenses plunged 23 percent to N5.45 billion in 2021 compared to N7.1 billion in 2020.
Honeywell’s profit before tax jumped 48 percent to N706 million in the nine-month period of 2021 compared to N476 million in 2020.
However, income tax expense jumped 225 percent to N497 million in 2021 from N193 million in the nine-month period of 2020.
Nigeria’s biggest miller, Flour Mills Plc acquired a 71.69 percent stake in Honeywell Flour Mills Plc for N80 billion in 2021.
Earnings per share declined 34 percent to N2.67 per share in nine months 2021 compared to N4.07 per share the previous year.
The company made a loss of N7.95 billion from the cash flow from operating activities compared to nine months of 2020 when it recorded a profit of N5.4 billion.
Honeywell also recorded a loss of N185 million on cash flow from investing activities in the nine-month period of 2021 compared to a loss of N624 million the previous year.
