NIGERIA – Leading wheat-based products manufacturer in Nigeria, Honeywell Flour Mills Plc, has reported a N983.8 million (US$2.3m) full year loss, representing a 188% decline in earnings from N1.13billion (US$2.7m) profit reported in the previous corresponding period ended March 31, 2021.

The decline in performance is attributed to 32.9% hike in cost of sales to N124.86 billion (US$300m) witnessed across all three of its operational factories in Apapa, Ikeja and Sagamu from N93.97billion (US$225m) in 2021.

Cost of sales in Apapa factory rose by 36.3% to N99.56billion in 2022 from N73.02billion (US$175m) in 2021, while Ikeja factory witnessed a significant increase of about 49% in its cost of sales to N6.99 billion (US$16.8m) in 2022 from N4.7 billion (US$11.29m) in 2021.

In addition, the company factory in Sagamu reported a 14.6% increase in cost of sales to N18.3 billion (US$43.9m) in 2022 from N15.98 billion (US$38.4m) in 2021.

However, the company closed the 2022 financial year with N136.43 billion (US$327m) revenue, 24% increase from N109.59 billion (US$263m) 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% to N108.8 billion (US$261m) in 2022 from N85.02 billion (US$204m) in 2021.

The Ikeja segment manufactures paste/noodles and the Sagamu segment manufactures Paste, while Apapa segment manufactures Semo, Wheat, Brown and Baker’s delight flour.

On the backdrop of increase in cost of sales, the company’s gross profit dropped by 25.9% to N11.57 billion (US$27.8m) from N15.62 billion (US$37.5m) in 2021 FY.

Although the management was prudent in its total operating expenses and finance cost as both dropped by 11% and 9.6%, respectively.

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 a continued investment in innovative product development, advanced technology infrastructure and operational efficiency.

Nigeria’s leading integrated Food and Agro-allied group, Flour Mills of Nigeria Plc, has obtained all requisite regulatory approvals to acquire a majority stake of 71.69% in the entity.

The acquisition has been approved by all relevant regulators, namely the Federal Competition and Consumer Protection Commission (FCCPC); Nigerian Exchange Limited (NGX); and the Securities and Exchange Commission of Nigeria (SEC).

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