Honeywell Flour Mills reports 37% drop in pre-tax profit on soft demand, rising costs
Honeywell Flour Mills remained profitable from April to December 2025, but earnings declined compared to the previous year due to lower revenue and higher expenses.
NIGERIA – Honeywell Flour Mills Plc has reported a pre-tax profit of N7.7 billion (US$5.5 million) for the nine months ended December 31, 2025,a 37% year-on-year decline from the N12.2 billion (US$8.7 million) achieved in the same period of the prior year.
The third quarter accounted for N5.1 billion (≈ $3.6 million) of that total, down from N8.8 billion (US$6.3 million) in Q3 2024, underscoring persistent pressure from weakening revenue and elevated cost lines.
The performance reflects a softening in underlying demand and rising expense pressures across operating and financing functions.
Honeywell’s nine-month revenue declined 12.65 % year-on-year to N242 billion (US$173 million) from N277 billion (US$198 million), driven principally by subdued volumes in flour and allied product lines.
Gross profit narrowed to N21.4 billion (US$15.3 million), down from N28.4 billion (US$20.3 million) in the prior comparable period as the cost of sales remained high at N220.5 billion (US$158 million).
The company’s operating structure reflected significant cost escalation, notably in selling and distribution expenses, which rose to N14.05 billion (US$10.0 million) from N8.9 billion (US$6.4 million) a year earlier.
This increase eroded operating leverage, with operating profit contracting sharply to N8.8 billion (US$6.3 million) from N22 billion (US$15.7 million) in the prior year.
Finance costs rose to N4.7 billion (US$3.4 million) while finance income stood at N4.5 billion (US$3.2 million), leaving a small net finance expense of N1.08 billion (US$0.8 million).
Foreign exchange losses narrowed significantly to N871 million (US$0.6 million) from N8.5 billion (US$6.1 million) previously, reflecting a degree of FX stability.
After accounting for these factors and a N1.5 billion (US$1.1 million) tax charge, profit after tax for the period settled at N6.2 billion (US$4.4 million).
The reduction in earnings highlights the sensitivity of milling margins to both top-line pressure and cost volatility, particularly selling, distribution and financing costs.
On the balance sheet, Honeywell reported total assets of N152.2 billion (US$109 million) as of December 2025, down from N167.5 billion (US$120 million) the previous year.
Property, plant and equipment remained the largest asset class at N72.9 billion (US$52 million), followed by inventories at N43.9 billion (US$31 million).
Shareholders’ equity increased 16.6 % to N43.6 billion (US$31 million), supported by retained earnings of N13.8 billion (US$9.9 million) and reserves of N19.3 billion (N$13.8 million).
Total liabilities declined to N108.6 billion (US$78 million), driven by reductions in trade payables and borrowings, which strengthened the company’s capital structure despite weaker profit momentum.
Honeywell’s share price has shown modest resilience, rising 1.14 % year-to-date to N22.15, even as earnings growth slowed.
The results suggest the company’s cost-management efforts have partially offset revenue headwinds, but higher operating and financing expenses remain a constraint on margin expansion.
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