Revenue Nearly Doubles, Driven by Flour Sales
Honeywell Flour Mills saw a 98.35% increase in total revenue, reaching N373.5 billion compared to N188.3 billion in the previous year. This surge was largely driven by the company’s core flour business, which accounted for N278.9 billion or 74.7% of total revenue. Pasta sales followed with N89.3 billion, while haulage services contributed N5.2 billion.
The jump in revenue, however, came with rising production costs. Cost of sales increased by 118.80% to N341.2 billion, significantly outpacing revenue growth. As a result, gross profit came in slightly lower at N32.2 billion, representing a marginal 0.30% decline year-on-year.
Operating Margins Squeezed by Rising Expenses
Despite top-line growth, Honeywell's profitability at the operating level was impacted by steep increases in overhead costs. Administrative expenses more than tripled to N12 billion, a 244.3% jump, while selling and distribution costs rose by 79.8% to N4.5 billion.
Consequently, operating profit declined by 35.64% to N18.2 billion, down from N28.4 billion in the prior year. The pressure from operational expenses underscored the challenges in managing inflationary cost environments and rising input costs.
Finance Gains Provide Crucial Support
Offsetting some of the operating headwinds, the company recorded a notable improvement in finance-related metrics. Finance income rose to N8.5 billion, bolstered by a realized exchange gain of N5.8 billion. At the same time, finance costs dropped sharply to N5.4 billion, compared to N36.2 billion the year before. This reduction was driven primarily by a decrease in exchange losses, which shrank to N787.8 million from N24.9 billion.
These improvements in the finance line played a critical role in restoring profitability and cushioning the impact of operational cost pressures.
Strengthened Balance Sheet and Shareholder Value
On the balance sheet, retained earnings climbed to N7.8 billion, recovering from a N6.9 billion deficit in the prior year. Total assets also expanded by 12.73%, reaching N167.9 billion, reflecting ongoing investments and asset appreciation.
Investor sentiment has mirrored the company’s turnaround. As of market close on May 30, 2025, Honeywell Flour Mills’ stock was trading at N21.00, representing a 233.33% year-to-date increase. This suggests growing investor confidence in the company’s strategic direction and financial stability.
Looking Ahead
While Honeywell Flour Mills' 2025 fiscal results demonstrate a return to profitability and a robust rebound from prior losses, the significant rise in operating costs indicates a need for more efficient cost control moving forward. Nonetheless, the company’s ability to leverage exchange rate gains and improve its financial structure has set a solid foundation for sustained growth in the coming periods.