SUN MAY 31 2026-theGBJournal| Honeywell Flour Mills Plc delivered a resilient earnings performance for the financial year ended March 31, 2026, posting a double-digit increase in net profit despite a decline in revenue.
The performance was driven by improved operating efficiency, lower impairment charges and stronger margins which helped offset softer sales.
According to its audited financial statements released on the Nigerian Exchange on Saturday, group revenue declined by 3.4% to N360.85 billion in 2026 from N373.51 billion a year earlier.
The contraction suggests the company faced pressure from weaker consumer demand, pricing constraints, changing product mix or volume challenges during the period.
Despite the decline in top-line performance, Honeywell demonstrated improved earnings quality as profit before tax rose by 3.3% to N21.90 billion from N21.20 billion recorded in the previous year.
The ability to grow pre-tax earnings while revenue declined points to stronger cost management, improved operational efficiencies and potentially better gross margins across its product portfolio.
Net profit showed an even stronger performance. Profit after tax increased by 13.0% to N16.49 billion from N14.59 billion in the prior year, reflecting both improved operating performance and potentially lower tax pressures relative to earnings growth.
The result indicates that management was able to convert a greater proportion of revenue into bottom-line profit despite a challenging operating environment.
Further supporting earnings quality was a reduction in impairment losses on trade receivables.
Credit loss provisions fell by 14.4% to N1.90 billion from N2.22 billion in 2025, suggesting improved customer collections, stronger credit controls and a healthier receivables portfolio.
Lower impairment charges directly support profitability and reduce the risk of future earnings erosion from bad debts.
One of the most significant highlights for investors was the substantial strengthening of shareholders’ funds. Total equity climbed by 44.0% to N53.93 billion from N37.45 billion a year earlier.
The sharp increase reflects the company’s ability to retain earnings and build capital, enhancing its financial resilience and providing a stronger buffer against economic shocks.
A stronger equity base also improves the company’s capacity to finance future expansion, invest in production capabilities and pursue growth opportunities without excessive reliance on debt.
Total assets remained broadly stable at approximately N167.45 billion, indicating that the growth in equity was driven largely by improved profitability and retained earnings rather than aggressive balance-sheet expansion. This suggests a more efficient utilization of existing assets to generate higher returns for shareholders.
For shareholders, perhaps the most important metric was earnings per share, which rose by 13.0% to 207.90 kobo from 183.96 kobo in the previous year.
The unchanged issued share capital of N3.97 billion means earnings growth was not diluted by the issuance of new shares, allowing existing investors to fully benefit from the improved profitability.
The results suggest Honeywell Flour is entering the new financial year with a stronger capital position, improved profitability and enhanced shareholder value despite a difficult consumer environment.
While the decline in revenue highlights ongoing challenges in Nigeria’s food and consumer goods market, the company’s ability to expand profits and strengthen its balance sheet may reassure investors that management is successfully navigating cost pressures and protecting returns.
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