Higher finance cost has dragged down the profit of Honeywell Flour Mills Plc for the financial year ended March 31, 2018, reports indicated.
Though the company grew its revenue and profit after tax by 34.28 per cent and 2.83 per cent respectively, in the current financial year, the firm’s finance cost increased by 23.5 per cent to N4.60billion, from N3.73billion recorded the previous year.
Analysis of the company’s result, which was released to the Nigerian Stock Exchange, shows selling and distribution expenses rose to N4.72billion, an increase of 38 per cent when compared to N3.42billion recorded in the corresponding period of 2017.
The company’s profit however dipped by 10.9 per cent to N4.87billion, from N5.47billion posted in the same period of 2017, representing a profitability ratio of 22.46 per cent and 23.88 per cent respectively.
Major key performance indicators of the company shed value in the review period, as profit margin stood at 6.19 per cent, from 8.09 per cent in the same period of 2017, while earning per share increased marginally by 3.7 per cent.
The Managing Director of the company, Mr. Lanre Jaiyeola, had in May told investors that the company would achieve profitability this year, even as they begin the construction of a new pasta production plant designed to process as much as 140,000 metric tonnes of wheat per annum.
According to him, if the company could survive the severe economic challenges that prevailed in 2017 including high exchange rates, the high cost of raw materials, dollar scarcity and the high cost of borrowing, then it can indeed accomplish more in 2018.
He also noted that the company was able to withstand last year’s recession by refocusing its business model on some key areas which helped to position them for
growth.
