Notore posts nine months N16.5bn revenue, N3.3bn operating profit

Notore Chemical Industries Nigeria Plc, a leading vertically integrated agro-allied and chemicals group, has announced a revenue of N16.5 billion and an operating profit of N3.343 billion for the nine months ended June 30, 2019.

The 2019 revenue showed a decline of 19.9 percent compared to N20.6 billion recorded in the corresponding period of 2018.

The decline resulted from a plant downtime during the period under review as a result of activities for the Turn-Around Maintenance (TAM) programme, which was expected to be completed by first quarter (Q1) 2020.

The company expects that after the completion of the TAM, the plant would operate at its nameplate capacity.

During the nine months under review, Notore recorded cost of sale of N13.234 billion, as against N12.422 billion in 2018. It ended with an operating profit of N3.343 billion, compared with N3.750 billion in 2018.

However, financing cost rose to N10.446 billion, up from N7.689 billion in 2018, which made the company to post a loss after tax of N7.103 billion as against N3.939 billion in 2018.

According to Notore, the Nigerian fertilizer demand is quite robust and is expected to continue to grow because of the federal government’s efforts to increase both the supply and demand for fertilizers, through provision of subsidies, grants and loans and through recent government initiatives such as the Presidential Fertilizer Initiative (PFI).

The company explained that the domestic fertilizer market was yet to reach its full potential as the consumption of fertilizer per hectare of arable land in Nigeria is below 10kg compared to the 200kg recommended by Food & Agriculture Organisation.

“Furthermore, the demand for urea and compound fertilizers, such as NPK, from the West African markets and Sahel African states is also quite significant. Notore sold all the urea that it produced (156,615MT) during the period under review,” it added.

Looking ahead, Notore said the current federal government policies in the fertilizer space are favourable to its business.

“Additionally, on-going market demand for NPK and NPK specialty will boost the business’ revenues when its newly installed and commissioned 2,000 MTD NPK blending plant begins production.

Consequently, Notore has begun gradual efforts to further diversify its revenue streams by selling specifically produced Notore seeds to farmers. To enhance profitability, Notore is working on financial initiatives to reduce its finance cost considerably,” it stated.