HONBUN reports 51% increase in six months net profit

May 16, 2023

Honey Bun (1982) Limited for the six months ended March 31, 2023 period reported revenues of $1.69 billion, 23% up from the $1.37 billion reported a year ago.

The Company had a 19% increase in cost of sales to close at $962.65 million (2022: $​810.69 million). Despite this, gross profit went up 30% or $170.26 million year-to-date to $732.99 million relative to $562.73 million reported in the prior corresponding period. Gross profit for the quarter amounted to $375.35 million (2022: $298.14 million).

According to HONBUN, “The company’s margins increased for the six-month period as a result of new operating processes and staff incentives that have increased overall productivity.”

The Company documented other losses for the six months ended March 31, 2023 totaling $2.64 million relative to gains of $1.11 million for the similar period in 2022. HONBUN reported other losses of $3.34 million for the quarter relative to losses of $6.21 million for the same quarter of 2022. Profit before operating expenses for the six months amounted to $730.35 million (2022: ​$563.84 million) a 30% increase when compared to the same period in the previous year.

Administrative expenses rose 26% to $323.10 million (2022: $255.96 million) for the six months, while selling, distribution and promotional expenses rose by 19% to $235.93 million (2022: $197.60 million). Total expenses for the six months amounted to $559.03 million, 23% above the $453.57 million recorded for the same period of 2022. For the quarter, total expenses increased by 23% to $292.33 million (2022: $237.87 million).

Despite the increase in expenses there was a 55% increase in profit from operations, which moved from $110.27 million in 2022 to $171.32 million for the period under review.

Finance income for the six-month period totalled $7.34 million (2022: $1.81 million), while for the quarter finance income closed at $3.93 million (2022: $1.04 million). The six months finance costs amounted to $3.51 million (2022: $641,796). As for the quarter, the finance cost increased by 570% to close at $1.99 million (2022: $296,729).

Profit before taxation closed the period at $175.16 million versus the $111.79 million booked in the same period last year. Pretax profit for the quarter amounted to $81.62 million (2022: $55.16 million).

Taxation for the six months amounted to $44.10 million (2022: $25.01 million), thus resulting in net profit of $131.06 million (2022: $86.78 million). For the quarter, net profit climbed to $61.77 million compared to the $41.27 million reported in the previous comparable quarter.

Consequently, earnings per share (EPS) for the six months amounted to $0.28 (2022: $0.18), while for the quarter the EPS amounted to $0.13 (2022: $0.09). The trailing twelve months EPS is $0.53. The number of shares used in this calculation was 471,266,950 shares. HONBUN last traded on May 15, 2023 at $6.29 with a corresponding P/E ratio of 11.96x.

Balance Sheet at a Glance:

As at March 31, 2023, total assets increased by 19% to close at $1.66 billion (2022: $1.40 billion). The increase was largely due to increases in ‘Property, plant and equipment’ and ‘Right-of-Use assets’ which closed at $707.01 million (2022: $616.56 million) and $65.48 million (2022: $1.93 million), respectively.

Shareholders’ equity totalled $1.23 billion compared to the $1.06 billion quoted as at March 31, 2022. This resulted in a book value of $2.62 relative to $2.24 the prior year.

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