Honeywell Flour Mills’ H1-2027 pre-tax profit jumps 1,115% to N31.40 billion as revenue rises 41%

Honeywell Flour Mills Plc recorded a 1,115.17% increase in pre-tax profit to N31.40 billion for the six months ended September 30, 2026, compared with N2.58 billion in the corresponding period of 2025, supported by stronger operating margins and improved segment performance.

According to the company’s unaudited half-year 2027 financial statements filed with the Nigerian Exchange (NGX) on October 30, 2026, revenue increased by 41.29% to N233.79 billion from N165.47 billion.

The half-year pre-tax profit has already exceeded the N21.90 billion reported for the full financial year ended March 2026, while profit after tax rose to N22.61 billion from N1.62 billion.

Operating Margins drive earnings recovery:

Honeywell’s earnings improvement was supported by stronger gross profitability, lower operating expenses and a swing from net finance expense to net finance income.

• Gross profit increased by 184.62% to N33.66 billion from N11.83 billion, as cost of sales grew by 30.29%, below the 41.29% increase in revenue.
• Gross margin improved to approximately 14.40% from 7.15%, while operating margin increased to 12.04% from 2.23%.
• Operating profit rose by 661.81% to N28.15 billion from N3.70 billion, reflecting the improvement in the company’s core operations.
• Selling and administrative expenses declined by approximately 18.5% to N7.37 billion, while net operating gains increased to N1.86 billion.
• Finance costs fell to N3.37 billion from N4.79 billion, while finance income rose to N5.81 billion from N1.47 billion.
• The company reported net finance income of N3.25 billion, compared with a net finance expense of N1.11 billion in the corresponding period of 2025.

Foreign exchange gains declined to N811 million from N2.22 billion, indicating that currency gains were not the main driver of the earnings improvement.

Pre-tax margin consequently increased to approximately 13.4% from 1.6%, while earnings per share rose to N2.85 from N0.20.

Sagamu Plant returns to profit:

Honeywell’s Sagamu operation recorded a significant improvement during the half-year period, moving from operating losses to profitability.

• Sagamu revenue increased to N46.70 billion from N35.91 billion, while gross profit recovered to N350 million from a gross loss of N5.34 billion.
• Sagamu recorded an operating profit of N1.04 billion, compared with an operating loss of N6.95 billion in the corresponding period of 2025.
• Tin Can revenue increased by 65.4% to N214.21 billion, while gross profit rose to N33.65 billion from N17.17 billion.
• Tin Can operating profit increased to N27.56 billion from N10.64 billion, remaining a major contributor to group earnings.
• For the year ended March 2026, Sagamu recorded pre-tax profit of N14.64 million but an after-tax loss of N4.43 billion, according to Nairametrics’ previous coverage.
• The latest results extend Honeywell’s earnings recovery after the company reported a decline in nine-month pre-tax profit to N7.7 billion for the period ended December 2025.

For the full year ended March 2026, operating profit declined to N16.58 billion from N18.08 billion, although net finance income supported pre-tax earnings.

With operating profit reaching N28.15 billion in the latest half-year period, the earnings recovery is now more strongly supported by operating performance.

Honeywell borrowings rise 61%:

Honeywell’s total borrowings increased by 60.92% to N52.27 billion from N32.48 billion at the end of March 2026, reflecting greater reliance on short-term financing.

• Short-term loans rose to N28.25 billion from N5.46 billion, while CBN long-term loans declined to N11.69 billion from N14.48 billion.
• Capital expenditure increased to N21.47 billion from N3.44 billion, lifting construction in progress to N53.56 billion.
• Operating cash flow rose to N16.12 billion from N13.46 billion, while net financing cash flow turned positive at N14.83 billion.
• Short-term intercompany loan receivables increased to N89.74 billion from N40.56 billion, while inventories rose by 39.38% to N43.85 billion.
• Total assets increased by 35.86% to N294.43 billion, while shareholders’ funds rose by 38.98% to N74.95 billion.
• Retained earnings increased to N45.14 billion from N24.12 billion despite dividend payments of N1.586 billion, consistent with the declared dividend of 20 kobo per share.

Honeywell’s shares closed at N22.55 on October 30, representing a gain of 25.28% during the month.

Investors will be monitoring whether operating cash flow can support the company’s higher capital expenditure and reduce reliance on short-term borrowings, alongside the recovery of substantial intercompany loan receivables.