Notore Records N2.9 Billion Operating Profit in First Quarter

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Goddy Egene

Notore Chemical Industries Plc Wednesday announced its unaudited results for the first quarter(Q1) ended December 31, 2018, showing resilience and improved performance.

Although revenue fell largely due to plant downtime caused by maintenance programme, operating profit increased significantly.

Specifically, Notore posted a revenue of N4.32 billion Q1 ended December 2018, which is for 2019 financial year, compared with N5.99 billion recorded in the corresponding period of 2018 financial year. Notore recorded an operating profit of N2.99 billion in Q1 2019, showing a jump of 412 per cent over its Q1 2018 operating profit of N0.58 billion.

However, the net finance cost of N3.09 billion in Q1 of 2019, made Notore to end the period with a loss of N93 million, which market operators said is a significant improvement compared to the loss of N1.958 billion recorded in the corresponding period of the previous year.

According to the company, the fertilizer market in Nigeria during the period under review was robust as it sold all the urea that it produced during the period into the domestic fertilizer market.

“Notore believes that the domestic fertilizer market is yet to reach its full potential. Furthermore, the demand for urea and compound fertilizers, such as NPK, from the West African markets and neighbouring countries bordering the northern part of the country is also quite significant,” it said.

Notore explained that the maintenance programme built in some reliability into the plant and it expects to enhance its plant reliability further when it carries out its turn-around maintenance (TAM) programme later in the year.

The company has already secured the TAM fund which should be disbursed this quarter and it has commenced the ordering of critical components of the items under the TAM scope in order to keep with the TAM schedule.

The company added that its working capital has improved significantly as a result of the refinanced short term facilities of N49.5billion to long term seven year facilities last financial year.

Looking ahead, Notore said it expects to exceed its 2018 full urea production figures and also work on financial initiatives to reduce its finance cost.

“The projected cost savings from Notore’s leverage is expected to boost its profitability. Furthermore, Notore believes that the current federal government policies in the fertilizer space and demand for NPK and NPK specialty blends are quite favourable for its business, consequently, Notore will be producing a significant quantity of NPK and NPK specialty blends this full year to boost its revenues,” the firm said.