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By NBF News
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Honeywell Flour Mills Plc said it is targeting a 60 per cent increase in its production capacity, aimed at boosting its share of the country's flour milling market.

According to a statement by the company, announcing its half year financial performance, its growth initiatives in the near term are focused on capacity expansion and aggressive marketing to take advantage of the quality and appeal of the Company's products to the generality of consumers.

The company said a 60 per cent increase in production capacity will take its daily capacity from 1,610 metric tonne to 2,610 metric tonne.

It added that the planned increased in capacity is scheduled for second quarter of year 2012.

According to the results for the six months period ended September 30, 2011, presented to the Nigerian Stock Exchange, NSE, the company recorded a turnover of N18.6 billion, representing an increase of three per cent on the N18.2 billion recorded in the comparative period in 2010.

Vice Chairman/Chief Executive Officer of the company, Mr. Babatunde Odunayo said that through prudent management of resources and strict implementation of internally developed cost reduction programs, the company recorded profit before tax of N1.3 billion for the six-months ended September, 2011.

He noted that the profit before tax was eight per cent higher than forecast while its profit after tax of N941 million was 13 per cent higher than forecast.

He added that the company also reduced its operating expenses by two year from N1.8 billion to N1.7 billion, year-on-year.

Odunayo assured that its cost optimisation initiatives will continue, adding that in a period occasioned by global economic uncertainty leading to a depreciating naira and rising interest rates, the company was able to reduce finance costs through better treasury management.

He noted that the company grew its total assets by over N6 billion, a 19 per cent year-on-year increase, from N31.2 billion as at 30th September, 2010 to N37.3 billion as at 30th September, 2011, while its net assets also grew 11 per cent to reach N15 billion from N13.5 billion between the comparative periods.

According to him, the company was able to leverage its operating efficiencies to surmount existing infrastructural and economic challenges occasioned by bad roads, poor electricity supply and rising cost of living in order to deliver on the expectations of shareholders.

'Achieving this strong performance was not without its challenges. Cost of sales rose 10% from N14.3 billion to N15.6 billion. This increase was driven, largely, by cost of raw materials, mainly wheat, and international freight costs.

'These results further attest to the quality and appeal of the Company's products, the professional character of its management team and the loyalty of its customers and partners.

'Overall, the Company recorded an impressive performance and barring unforeseen circumstances, management expects this improving trend to continue till the end of the financial year,' he added.