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Notore says strong headwinds dampen Q2 financial results

High finance cost takes toll on Notore Q3 profitability

Notore Chemical Industries Limited (Notore) reported revenue of N7.92 billion for the second quarter (Q2) ended June 30 2023.

Ohis Ohiwerei, Group Managing Director, Notore said the company faced strong headwinds during the second quarter, dampening financial results, but the company explored strategic actions to mitigate risks”.

The group reported Q2 loss after tax (LAT) of N38.005billion from N2.606billion profit after tax (PAT) in same period of 2022. The group’s net finance cost spiked to N28.798billion in Q2’23 from N8.244billion in Q2’22.

According to Ohiwerei: “The second quarter ended June 30, 2023, was a challenging period primarily due to the unexpected cessation of gas supply from a critical gas source earlier this year. The timeline for resolution extended beyond the initial estimations, affecting the Company’s production quantities and financial performance during this period.”

He noted: “To resolve this issue, Notore has explored all possible alternatives to restore gas supply and has now agreed with two complimentary gas sources to ensure consistent gas supply going forward. A new Gas Supply Agreement is estimated to be completed by mid-third quarter 2023.”

Ohiwerei added that the company has implemented strategic action plans to enhance its resilience and mitigate the potential risks associated with production disruptions in the future to meet production demands adequately, noting “During this period, the company has also taken proactive measures to bolster the Plants’ production capabilities and fortify its reliability for optimal performance.”

On some of its efforts to bolster relationships with stakeholders, Ohiwerei said: “Despite some temporary setbacks, Notore remains unwavering in its mission to enhance the lives of its stakeholders. A shining example of this commitment is the recent tree-planting initiative in collaboration with the Emir of Gombe, Abubakar Shehu Abubakar III. This remarkable endeavour aims to combat the detrimental impact of deforestation and desertification in Nigeria.”

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He continued: “In addition to its environmental efforts, Notore continues to make a significant impact through its extension services and educational initiatives. The Company tirelessly advocates for agricultural best practices and promotes sustainable farming techniques. By encouraging farmers to maximize their fertilizer usage and enhance their yields per hectare, Notore plays a pivotal role in meeting the food demands of a rapidly growing population. In this way, Notore reaffirms its dedication to nourishing the nation and contributing to the overall well-being of Nigeria and its people.”

He noted that the company is willing and ready to contribute to the Federal Government’s push for food security, adding “Amidst Nigeria’s surging demand for food and the Federal Government’s unwavering commitment to boost agriculture, this sector has emerged as a linchpin for the country’s prosperity. The significance of the fertilizer market cannot be overstated, as it plays a pivotal role in ensuring food availability, making it a matter of national security. The issue has taken on even greater urgency since many Nigerians are involved in agriculture.

“In this critical context, Notore stands as a strategically positioned player. The company is poised to seize the opportunities presented by the soaring domestic and West African market demand for fertilizers and agricultural products. With the right approach and dedication, the company will continue to play a vital role in meeting the food demands of the nation and the region.”