Monday, September 26,
2016
HONEYWELL Flour Mills
Plc, a market leader in the Nigerian foods industry, has defied the tough
operating environment to record a four per cent revenue growth and total assets
of growth of 12 per cent from N67.94 billion reported in 2015 to N76.05 billion.
Asset growth in the
review period was largely determined by the company’s capacity expansion
projects.
During the year under
review, the company recorded a loss for the first time in its 20-year history,
amounting to N2.87 billion before taxes. This situation was driven by adverse
effects of forex fluctuations which impacted input costs.
Besides, the company
has also embarked upon several strategic initiatives to grow revenues and
reduce costs. A key revenue growth strategy, according to the company, is
anchored on backward integration that will result in the production of more
products from locally grown crops.
According to a
statement by the company shortly after its Annual General Meeting in Lagos on
Tuesday, it stated that “the new state-of-the-art, multi-billion Naira
facilities in our foods and agro-allied industrial complex in Sagamu, Ogun
State, nearing completion, will go a long way in supporting us to actualise our
backward integration plans.”
The company will also
continue to invest in new product research and development to enable the
production of more varieties of food products for its teeming consumers.
Speaking during the
seventh AGM, the Chairman of the company, Dr Oba Otudeko CFR, while reviewing
the macroeconomic and operating environment said: “There were series of
challenging factors that led to increased uncertainty and rising cost pressures
in the Nigerian economy.”
He went further to
state that “Consumer spending progressively dropped throughout the operating
period under review. Prices of most consumer goods rose sharply in response to
higher input costs. In our case, we have only taken modest price increases to
ensure our brands remain affordable and to sustain food security.”
He, however, reassured
all that the board and management team of the company are determined to do
their best to prevent a reoccurrence of this unanticipated dip in the company’s
earnings and steer the company back to the path of profitability.
Also speaking at the
AGM, the Managing Director of the company, Olanrewaju Jaiyeola said, “The
Company developed some strength in operational efficiency in the financial year
ended March 2016. We have found even greater strength in controlling costs. We embarked
on several strategic projects to reduce cost. One of the most important steps
we took was to begin the process of developing local sources and partnerships
for raw materials within the context of our backward integration strategy.”
He concluded by reiterating
that the company has been able to navigate through this turbulent period by
streamlining cost structure while several projects have commenced to entrench
continuous improvement and innovations across the business.
A shareholder, Sir
Sunny Nwosu, commended the company on the progress of work at the new,
ultra-modern Sagamu factory. He described the on-going Sagamu project as a
strategic initiative that will help the Company further grow market share;
increase revenue significantly and support the realisation of its backward
integration strategy.
Shareholders of the
company also commended the board of directors and its management for being able
to steer the affairs of the company during the financial year ended March 31,
2016, despite the tough economic challenges rocking the country.
SOURCE: VANGUARD