Africa’s leading fertiliser and agro-allied company, Notore Chemical Industries Plc, has recorded N2.04billion operating profit in the first quarter (Q1) of the 2019/2020 financial year on the back of its plant’s reliability which led to improved production.
The company disclosed this in its unaudited financial statement for three-month period ended December 31, 2019, that is, Q1 2020 financial year.
The result released on the Nigerian Stock Exchange (NSE) shows that Notore recorded revenues of N8.18billion for the three-month period ended December 31, 2019 –that is Q1 2020 Financial Year (FY), compared to N4.32billion for the corresponding period in Q1 2019 FY.
The increase in revenue was due to improvement in the plant’s reliability, hence an increase in urea production volumes by 83percent (44,076MT in Q1 2019 FY compared to 80,777MT in Q1 2020 FY).
However, Notore’s operating profit declined by 39percent from N3.34billion in Q1 2019 FY to N2.04billion in Q1 2020 FY; and this decline in operating profit was due to a drop in other income by 78percent. Notore recorded a loss of N1.39billion during the Q1 2020 FY and a Net Finance cost of N3.43billion.
The company noted that opportunities for better performance are high as the domestic fertilizer market is yet to reach its full potential.
“The fertilizer market in Nigeria during the period under review was robust as Notore sold all the urea that it produced during the period in both domestic and international fertilizer market.
“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 noted.
The company added that constant natural gas (main feedstock for producing urea fertilizer) supply has been one of Notore’s key strengths, as the company is in line to achieve its 1,500 MTD name-plate production capacity following its successful draw down of the Turn-Around Maintenance (TAM) facility, which will be utilised to increase the plant’s reliability.
“In line with Notore’s TAM, the company has commenced the ordering of critical components of the items under the TAM scope in order to keep with the TAM schedule,” it said.
On the outlook for the 2020 financial year, the company said it expects to exceed its 2019 financial year urea production figures and is also working on various financial initiatives to reduce its finance cost.
