Q3’19: Notore’s high finance cost depresses bottom-line
By Peter Egwuatu
NOTORE Chemical Industries Nigeria Plc, has announced a revenue of N16.5 billion in the 2019 third quarter, Q3’19 representing a decline of 19.9 per cent compared to N20.6 billion recorded in the corresponding period of 2018.
Meanwhile, the financing cost rose to N10.45 billion, up from N7.69 billion in 2018, which made the company to post a loss after tax of N7.1billion as against N3.94 billion in 2018.
The Company in its Q3’19 results sent to the Nigerian Stock Exchange, NSE showed an operating profit of N3.3 billion for the nine months ended June 30, 2019.
Explaining the reason for the drop in revenue, the company said that 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 are expected to be completed by first quarter (Q’1) 2020. The company expects that after the completion of the TAM, the plant will operate at its nameplate capacity.
During the nine months under review, Notore recorded cost of sale of N13.2 billion, as against N12.4 billion in 2018. It ended with an operating profit of N3.3 billion, compared with N3.75billion 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 is 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 and 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 noted.
Looking at the future, Notore in a statement said: “The current Federal Government policies in the fertilizer space are quite favourable to our business.”