Honeywell Flour Mills posts N16.052 billion Gross Profit

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Honeywell Flour Mills Plc, a part of the Honeywell Group, is a major flour milling company in Nigeria.

With over 20 years of experience, the firm has gathered extensive knowledge and skill in the production of flour and a range of flour-based products. The company’s superior operational efficiency make it to remain a dominant player in the industry.

In its audited financial report for the year ended March 31, 2018, Honeywell Flour Mills closed the year with the Gross Profit of N16.052 billion representing a growth of 26.27% year on year.

The revenue of the firm grew 34.29%, closing at N71.476 billion from the previous close of N53.227 billion in 2017.

Cost of sales stood at N55.423 billion bringing the Gross Profit to close at N16.052 billion advancing by 26.27% from N12.712 billion it closed in 2017.

Net Finance Cost in 2017 was up by 64.90% closing at N4.604 billion from N2.792 billion in 2017

Profit before Tax declined by 10.92%, closing at N4.872 billion as against the previous close of N5.469 billion in 2017.

Taxation for the year under review was N445.3 million bringing the Profit after Tax to close at N4.426 billion appreciating by 2.83% from N4.304 billion it recorded in 2017

Net assets of the firm grew by 10.33% to close at N124.835 billion, from the previous close of N113.151 billion in 2017.

With the current share price of N2.29 and Earnings Per Share (EPS) of 55.82 kobo, the P.E ratio of the firm is 4.10.

Honeywell’s low liquidity position, indicated by its current ratios, could be a concern, although the trend has been improving recently.

The Debt to Equity ratio of Honeywell Flour Mills from 2017 to 2018 indicates a positive leverage metrics.

In the long term, Honeywell is positioning itself to both create and deliver sustainable value to its stakeholders. The firm has an effective corporate governance policy which is driven by its Board of Directors.

With multi-billion Naira modern factory, equipped with state-of-the-art machinery for wheat discharge/storage, milling, quality control and warehousing, Honeywell has 2 operating power supply systems of 4 and 5 megawatts capacity respectively, using diesel as an alternative source of fuel.

It has recently completed a third power supply system which runs on gas with a total installed capacity of 12 megawatts. With the gas power plant as an alternative, production bottlenecks caused by shortages in diesel supply and associated quality problems will be minimized. The company also expects to make substantial cost savings in the use of gas to generate our power, and these savings have been incorporated in the profit forecast.

 

Demand for Honeywell Flour product has continued to grow exponentially, as evidenced by its turnover figures. In a bid to cater to its increasing clientele, it has consistently upgraded its production facilities. Production commenced in 1998 following the construction and installation of a 200 metric tonnes wheat mill at the Tin Can Island site. Following the successful commissioning of the mill, the sale of Honeywell Superfine Flour commenced on July13, 1998.

In 1999, the company embarked on a remodeling project to increase the milling capacity to 360 tonnes per day. In November 2001, installed production capacity was increased to 610 metric tonnes per day. In August 2005, the company took a giant leap with the installation of two mills capable of producing 500 metric tones a day respectively. This addition brought the total installed capacity of the company to 1,610 metric tonnes per day further strengthening its position as a key player in the flour milling industry in Nigeria.

 

 

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