By Peter Egwuatu
HONEYWELL Flour Mills Plc has released its financial results for the first quarter ended June 30, 2018, posting N17.7 billion revenue from net sales of flour, semolina, wheat meal, pasta and instant noodles products.
This represents a three percent decline from the N18 billion achieved in the corresponding period of 2017. The key impediment to growth during the period, according to the company, was the Apapa Traffic Gridlock which has virtually crippled business activities in Lagos State.
The company, in a statement said: “The dilapidated road infrastructure and chaotic traffic situation in and around the nation’s premier port has made it inordinately difficult and enormously expensive to transport goods out of the factory in Tin can Island. This challenge has resulted in an effective freight cost increase of about 25 percent.”
Further analysis of the result shows that cost of goods sold increased by one percent relative to same period last year following rising prices of wheat; a major raw material input and this contributed to a decline in Gross Profit from N3.8 billion to N3.2 billion.
Operating profit was about N1 billion after netting off Selling and Administration costs in the period. However, the company was able to manage its finance cost which declined N892 million for the quarter from N1.3 billion in the equivalent quarter of the previous year. Consequently, a reduced Profit before Tax of N127 million was recorded.