Honeywell Flour Mills Plc has reported a profit before tax of N21.896 billion for the full year ended 31 March 2026, according to its recently filed financial statements on the Nigerian Exchange.

This reflects a 3.29 per cent year-on-year increase from N21.199 billion in FY 2025, driven largely by lower cost of sales and net finance income, according to Nairametrics.

This is despite the drop in revenue and weaker operating profit.

Revenue declined by 3.39 per cent YoY to N360.849 billion, while 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 for the reporting period ended 31 March 2026, compared with no dividend in 2025.

Revenue: N360.849 billion, down 3.39 per cent YoY.

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

Gross profit: N36.430 billion, up 12.98 per cent YoY.

Operating expenses: N23.256 billion, up 21.88 per cent YoY.

Operating profit: N16.577 billion, down 8.34 per cent YoY.

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

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

Total assets: N216.709 billion, up 29.42 per cent YoY.

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

Honeywell’s full-year performance was shaped by a weaker top line, but a stronger bottom line attributed to the decline in cost of sales and net finance income.

Revenue declined to N360.85 billion from N373.51 billion, mainly due to the sharp fall in pasta revenue.

Flour products remained the dominant revenue driver, rising to N318.24 billion from N278.96 billion and contributing about 88.19 per cent of total revenue.

Pasta products fell to N35.65 billion from N89.31 billion, while 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 per cent of group revenue, while Sagamu contributed N35.65 billion, or about 9.88 per cent.

Tincan also carried most of the group’s earnings, with profit before tax of N21.88 billion, while 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, the cost of sales, just like revenue declined.

The main driver of group cost of sales was raw and packaging materials consumed, which stood at N291.22 billion, accounting for almost 90 per cent 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, while freight expenses fell to N7.29 billion.

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

However, operating profit fell to N16.58 billion from N18.08 billion as 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, which offset the benefit from lower administrative expenses.

Finance income rose to N9.22 billion from N8.54 billion, helping to offset the decline in operating profit and lift 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, alongside interest income from bank deposits of 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, although this was lower than N3.87 billion in the prior year.

Interest on bank loans rose to N1.03 billion from N659.65 million, while 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, allowing pre-tax profit to rise to N21.90 billion from N21.20 billion.

On the 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, while 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.

Honeywell Flour Mill began the year at N21.90 per share and closed May at N18.20, representing a year-to-date loss of 16.9 per cent.

Month-to-month, the stock gained 1.11 per cent.