The increase in revenue, according to the company, wasdriven, largely, by the increased production capacity of the company having recently added 1,000 metric tonnes per day via two new mills.
The cumulative effect of revenue increase and reduction in costs led to a growth in company's Profit after Tax (PAT) by 18 per cent from N1.7 billion in the corresponding period of last year to N2 billion in the period under review.
The income statement also showed that gross profit for the same period was N7.76 billion, from the N5.48 billion reported for the corresponding nine-month period ended
However, increase in operating costs, which rose by 42 per cent from N3.04 billion to N4.33 billion was attributed to increased overheads necessary to operate the expanded production capacity, rising finance costs and increased marketing expenses needed to maintain brand equity, to increase consumer awareness and increase product visibility.
Rising finance costs had an adverse impact on profitability as the company fulfils its obligations on the debt component of funds used to finance the additional production capacity. But the management said it is currently exploring several strategic options to reduce this cost.
The expansion activities, contributed to the growth of the company's total assets which rose by 20 per cent from N55.4 billion as at
Commenting on the financial results, the Executive Vice-Chairman and CEO of HFM, Mr.
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