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How Honeywell Flour Mills Lost N983.8m in 2022 Financial Year

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Honeywell Flour Mill Factory - Investors King

In the wake of high inflation and cost of production, Honeywell Flour Mills has recorded a loss of N983.8 million in its 2022 financial year. A decline of 188% from the previous financial year. 

The company disclosed this in its financial statement filed with the Nigerian Exchange Limited (NGX). In the financial statement, Honeywell reported a N172.14 million loss before profit, down from the N1.58 billion profit before tax reported in the 2021 financial year.

The audited results revealed a 34.8% increase in the cost of raw and packaging materials to N111.44 billion in 2022, up from N82.66 billion in 2021. This accounted for 89.3% of the overall cost of sales in the year under review. 

Investors King gathered that Honeywell Flour mill’s profit dropped from N1.13 billion generated from the financial year ended March 2021 to N983.8 million in March 2022, and this was majorly caused by its rising cost of sales. 

Honeywell’s cost of sales grew by 32.9% from N93.97 billion to N124.86 billion. This high cost was a result of the jump in the cost of operation in Sagamu, Ikeja and Apapa factories.

The cost of sales in Sagamu rose by 14.6% to N18.3 billion in 2022 from N15.98bn in 2021. Apapa factory expanded by 36.3% to N99.56 billion in 2022 from N73.02bn in 2021 while Ikeja factory witnessed a significant increase of about 49% in its cost of sales to N6.99bn in 2022 from N4.7 billion in 2021. 

However, the company closed the 2022 financial year with N136.43billion revenue, a 24% increase from N109.59 billion in 2021, largely driven by revenue generated from the Apapa factory. 

Revenue generated at the company’s Apapa operational factory rose by 28% from N85.02 billion in 2021 to N108.8 billion in 2022. 

The Ikeja segment manufactures paste/noodles and the Sagamu segment manufactures Paste, while the Apapa segment manufactures Flour, Semo, Wheat mean, Brown flour and Baker’s delight flour.

On the backdrop of an increase in the cost of sales, the company’s gross profit dropped by 25.9% to N11.57 billion in 2022 FY from N15.62 billion in 2021 FY. Although the management was careful in managing its operating expenses and finance cost, both still dropped by 11% and 9.6%, respectively. 

The board at the meeting held recently agreed to recommend the cancellation of its unissued shares to the shareholders at the next Annual General Meeting in compliance with the provisions of the Companies and Allied Matters Act (CAMA) 2022 and the public notice of the Corporate Affairs Commission (CAC) dated April 16, 2021. 

 

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Merger and Acquisition

Access Bank Plans Expansion Into Angolan Market

Access Holdings Plc has announced its planned acquisition of  a 51 percent majority equity stake in Angolan Bank, Finibanco.

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Access Holdings Plc has announced its planned acquisition of  a 51 percent majority equity stake in Angolan Bank, Finibanco.

Investors King learnt that Access Bank Plc is expanding its presence to Angola through the acquisition of a 51 percent stake in Finibanco.

The acquisition of Finibanco was disclosed in a filing to the Nigerian Exchange Limited by Access Holdings Plc.

Finibanco is a full-service commercial bank with over 20 branches and around $300 million in total assets in Angola.

According to Access Holding Secretary, Mr Sunday Ekwochi, the Angolan market as the sixth largest economy in Africa and the seventh largest country overall, with a vast and diversified natural resource base and a growing population, represents a strong potential for the bank’s growth aspirations

The Secretary further stated that the transaction is subject to regulatory approvals in Nigeria and Angola. The transaction is expected to be completed during the first half of 2023. This will however be subjected to customary conditions.

Access Bank has been on an acquisition spree since the beginning of 2021. The acquisition of a majority stake in Finibanco makes it Access’s sixth acquisition in the last 18 months.

In June 2022, it acquired a $37 million stake in Kenya Sidian Bank. Other acquisitions include African Banking Corporation of Botswana Limited, African Banking Corporation Zambia Limited, as well as Cavmont Bank.

Access bank is one of the leading banks in Nigeria. As a commercial bank, it operates through a network of more than 700 branches and service outlets, spanning 3 continents, 17 markets and 45 million customers.

The lending bank employs 28,000 people in its operations in Nigeria and has subsidiaries in sub-Saharan Africa and the United Kingdom. It also has a branch in Dubai, UAE and representative offices in China, Lebanon and India.

As at 31 March 2022, Access Bank had total assets of approximately US $28.8 billion.

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Kogi Government Seals Dangote’s Largest Cement Factory

The largest cement factory in Nigeria owned by Aliko Dangote, the richest black man, has been shut down by the Kogi State Internal Revenue Service (KGIRS) for tax evasion and acquisition controversy.

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Dangote Cement Obajana 1

The largest cement factory in Nigeria owned by Aliko Dangote, the richest black man, has been shut down by the Kogi State Internal Revenue Service (KGIRS) for tax evasion and acquisition controversy.

A staff, who works at Dangote Cement factory in Obajana, Kogi State, confirmed the development, saying “in fact, I’m on my way home as we speak”.

The decision, which was obviously backed by the Kogi State House of Assembly, was supported by Kingsley Fanwo, the Kogi State Commissioner for Information, who said the decision was taken after an investigation was conducted into the acquisition of Obajana Cement Company by Dangote.

He said: “Pursuant to the Constitutional authorities of the Kogi State House of Assembly, and upon petition by the people of Kogi State, an investigation was carried out on the acquisition of Obajana Cement Company by Dangote Company.

“It was found that no valid acquisition took place, as Dangote could not show evidence of what was paid as consideration for the acquisition.

“The legislators invited the Chairman of the Company, Aliko Dangote, before the house for explanations but he failed to appear before the state assembly, giving excuses.

“The House of Assembly, therefore, ordered the closure of the company pending when they are able to present it with credible evidence of a valid acquisition.”

The cement factory was estimated at 16.25Mta capacity across five lines of production, making it the largest cement factory in Nigeria.

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NNPCL Acquires 380 Oando Retail Stations Among Other Assets

The Nigerian National Petroleum Company Limited (NNPCL) has acquired all 380 Oando retail outlets among other assets which include eight Liquefied Petroleum Gas (LPG) plants and three lube blending plants. 

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The Nigerian National Petroleum Company Limited (NNPCL) has acquired all 380 Oando retail outlets among other assets which include eight Liquefied Petroleum Gas (LPG) plants and three lube blending plants. 

The Nigerian National Petroleum Company Limited has acquired OVH Energy, a major downstream player in the oil and gas industry.

OVH Energy (OVH) Limited owns Onado and operates all the Oando- branded retail service stations across the country.

Speaking at the unveiling of one of the new NNPC Ltd stations formerly Oando in Abuja on Saturday, the Group Chief Executive Officer NNPC Limited, Mele Kyari, said, “The acquisition will bring over 380 additional filling stations under NNPC Retail brand in Nigeria and Togo”. 

He added that NNPC Limited has a target to attain 1,500 retail oil stations. The recently rebranded company aims to be the largest petroleum product retail network in Africa.

“It is absolutely not about assets, we are building relationships. At this moment, we are the largest downstream company in Nigeria and by this merger.  We are also likely going to be the largest downstream company in Africa.” the GCEO, Mele Kyari stated.

Other assets acquired under the OVH Energy deal include a reception jetty (ASPM) with 240,000 metric tons monthly capacity. The deal also included eight Liquefied Petroleum Gas (LPG) plants, three lubes blending plants, three aviation depots, and 12 warehouses. 

Investors King could recall that the passage of the Petroleum Industrial Act, 2021 has transformed NNPC into NNPC Limited. 

Hence NNPCL is expected to operate as a commercial and profit-focused company. Unlike NNPC which ran for the government by remitting to the Federation Account, NNPCL has no mandate to do so.

The acquisition of OVH Energy Marketing Limited by the Nigerian National Petroleum Company Limited (NNPCL) is considered a landmark deal as NNPCL is set to refocus into retail oil marketing. 

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