In a surprising reversal of fortunes, Honeywell Flour Mills Plc has posted a profit of N14.6 billion for the year ended March 31, 2025, adding to a trend of consumer goods companies rebounding from Nigeria’s harsh macroeconomic headwinds.
This performance follows last year’s N10.1 billion loss and was significantly driven by a combination of exchange rate gains and significant growth in revenue.
While much of the private sector continues to reel from the consequences of currency volatility, Honeywell leveraged the naira’s relative stability in recent months to post N8.5 billion in finance income, a key contributor to its N21.2 billion profit before tax.
The company also reported a modest N787.9 million net unrealised FX loss, a sharp drop from the staggering N25 billion it recorded in 2024.
This shift reflects a broader rebalancing in foreign exchange markets, with the naira stabilising around N1,600/$ after peaking at almost N2,000/$ in early 2024. As Honeywell sources a significant portion of its raw materials from abroad, the FX reprieve came as a relief, improving cost predictability and liquidity planning.
“Finance income was largely attributed to the impact of favourable exchange rate movements on dollar-denominated transactions,” the company said in its annual report.
Revenue doubled, but cost more than doubled
Honeywell’s revenue almost doubled to N373.5 billion in full year (FY) 2025 from N188.3 billion in 2024, marking a 98 percent increase.
Sales of flour products made up the bulk of this figure, contributing N278.9 billion or 74.7percent of total revenue.
Pasta sales followed at N89.3 billion, while haulage services added N5.2 billion.
But the cost of sales more than doubled, rising from N155.9 billion in the previous year to N341.2 billion. Hence, gross profit held firm at N32.2 billion, a nearly flat year-on-year change.
Read also: What is behind Honeywell’s pump in the NGX?
Cooling inflation tipped to stabilise input costs
The broader operating environment is improving which may likely lower rising input costs. Nigeria’s headline inflation, which peaked above 33 percent in 2024, began to slow in early 2025 as the central bank’s tighter monetary policy and exchange rate reforms started to budge.
With core inputs like energy and imported packaging stabilising, companies like Honeywell found room to improve margins.
Administrative expenses rose significantly to N12.1 billion from N3.5 billion, largely due to one-off impairment charges and the incorporation of free trade zone subsidiaries. Still, overall operating profit hit n18.1 billion — a resilient showing given past volatility.
Consumer goods firms on a comeback
Honeywell joins the ranks of Nestlé Nigeria, Unilever, and Cadbury, which have all recently reported quarterly or annual profits — a sharp contrast to their pandemic-era and post-FX liberalisation losses. Investors are beginning to reward these turnarounds, with Honeywell’s stock price climbing from N3.90 in March 2024 to N12.40 as of March 2025, a more than 200 percent increase.
As of market close on 30th May 2025, shares of Honeywell Flour Mills were priced at N21.00, reflecting a year-to-date performance of 233.33 percent.
Strategic shifts and growth hints
Incorporating new free zone subsidiaries and restructuring legacy assets point to strategic bets by Honeywell to hedge against future tax or import-related risks. The company is also trimming debt; non-current borrowings fell from N28.9 billion in 2024 to N20.3 billion in 2025.
Although the firm did not declare a dividend to preserve liquidity for expansion, its N37.4 billion shareholders’ fund (up 65%) suggests robust retained earnings, likely positioning it for future capital investment or dividend payout resumption.
If the naira holds steady and inflation continues its descent, Honeywell — and by extension the wider consumer goods sector — could enter a new growth phase. But the company’s exposure to dollar-denominated loans and imported inputs means vigilance is still required.
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