Honeywell Flour Mills posts N21.9bn pre-tax profit, declares N1.59bn dividend

Honeywell Flour Mills Plc has reported a profit before tax of N21.896 billion for the full year ended 31 March 2026. This is according to the company’s financial statements filed on the Nigerian Exchange.

The figure represents a 3.29% year-on-year increase from N21.199 billion in FY 2025. The growth was driven by lower cost of sales and net finance income, despite a drop in revenue and weaker operating profit.

Revenue declined by 3.39% YoY to N360.849 billion. Finance cost fell to N3.905 billion from N5.429 billion recorded in FY 2025.

The directors recommended a dividend of N1.59 billion, representing N0.20 per ordinary share of 50 kobo each. This compares with no dividend in 2025.

Key highlights (FY 2026 vs FY 2025)

Revenue: N360.849 billion, down 3.39% YoY

Cost of sales: N324.419 billion, down 4.94% YoY

Gross profit: N36.430 billion, up 12.98% YoY

Operating expenses: N23.256 billion, up 21.88% YoY

Operating profit: N16.577 billion, down 8.34% YoY

Finance costs: N3.905 billion, down from N5.429 billion

Post-tax profit: N16.487 billion, up 13.01% YoY

Total assets: N216.709 billion, up 29.42% YoY

Shareholders’ funds: N53.932 billion, up 44.03% YoY

Driving the numbers

Honeywell’s full-year performance was shaped by a weaker top line but a stronger bottom line. The decline in cost of sales and net finance income boosted profit.

Revenue dropped to N360.85 billion from N373.51 billion, mainly due to a sharp fall in pasta revenue. Flour products remained the dominant revenue driver, rising to N318.24 billion from N278.96 billion. That segment contributed about 88.19% of total revenue.

Pasta products fell to N35.65 billion from N89.31 billion. Haulage services increased to N6.96 billion from N5.24 billion.

On a segment basis, Tincan generated N325.20 billion in revenue, representing about 90.12% of group revenue. Sagamu contributed N35.65 billion, or about 9.88%.

Tincan also carried most of the group’s earnings, with profit before tax of N21.88 billion. Sagamu was almost flat at pre-tax profit of N14.64 million after posting a loss after tax of N4.43 billion.

On the direct cost side, cost of sales declined just like revenue. The main driver was raw and packaging materials consumed, which stood at N291.22 billion, accounting for almost 90% of total cost of sales.

Plant maintenance and power cost was N13.64 billion. Employee costs rose to N5.72 billion. Depreciation declined to N4.91 billion. Freight expenses fell to N7.29 billion.

Overall, cost of sales declined to N324.42 billion from N341.26 billion. This supported the improvement in gross profit despite the revenue decline.

However, operating profit fell to N16.58 billion from N18.08 billion. Selling and distribution expenses increased sharply to N11.38 billion from N4.58 billion. This increase was driven largely by marketing expenses of N6.31 billion and product development expenses of N4.69 billion. These offset the benefit from lower administrative expenses.

Finance income rose to N9.22 billion from N8.54 billion. This helped offset the decline in operating profit and lifted pre-tax profit for the year.

The increase was driven mainly by interest income from loans to related parties, which rose to N4.80 billion from N2.70 billion. Interest income from bank deposits added N102.52 million. However, exchange gain declined to N4.32 billion from N5.85 billion, partially offsetting the stronger interest income.

Finance cost also declined to N3.90 billion from N5.43 billion, further supporting earnings. The biggest component was interest expense on subsidized loans at N2.22 billion, though this was lower than N3.87 billion in the prior year.

Interest on bank loans rose to N1.03 billion from N659.65 million. Interest on related-party loans came in at N533.97 million. The absence of the prior-year exchange loss of N787.87 million also helped reduce total finance cost.

Overall, Honeywell recorded net finance income of N5.32 billion, compared with N3.11 billion in FY 2025. This net finance income helped reverse the pressure from operating profit, which declined to N16.58 billion from N18.08 billion. Pre-tax profit rose to N21.90 billion from N21.20 billion.

Balance sheet

Total assets increased to N216.71 billion, supported by higher property, plant and equipment, and the creation of short-term loan receivables of N40.56 billion.

Inventories declined to N31.46 billion from N48.12 billion. Cash improved to N9.81 billion.

Current liabilities still exceeded current assets. But the company disclosed that Golden Penny Foods Limited issued a letter of support to help the group meet obligations as they fall due.

Market reaction

Honeywell Flour Mill began the year at N21.90 per share and closed May at N18.20. That represents a year-to-date loss of 16.9%. Month-to-month, the stock gained 1.11%.