Notore Chemical Industries reports N6.39bn loss in 2020
By Kayode Tokede
Notore chemical industries Plc has reported N6.39billion loss in its result and accounts for full year ended September 30, 2020 as against a loss of N5.75billion reported in full year ended September 30, 2019.
The firm reported loss before income tax of N13.9billion in 2020 as against N10.25billion in 2019. Weak revenue, hike in cost of sales and finance costs contributed to losses reported in the year under review.
Notore chemical industries reported 12.23 per cent decline in revenue to N18.8billion in 2020 from N21.42billion reported in 2019 as cost of sales closed in 2020 at N21.6billion as against N17.45billion reported in 2019.
Further check from the profit & loss figures showed that the company’s finance cost rose by 71 per cent to N23.41billion in 2020 from N13.69billion reported in 2019.
From balance sheet position, the total assets of Notore chemical industries gained 12.3 per cent to N220.76billion from N196.58billion reported in 2019.
The Group Chief Executive Officer and Group Managing Director of Notore Chemical Industries, Mr. Onajite Paul Okoloko in a statement said, “Last year, our business was faced with many challenges. Despite the harsh economic situation –largely due to the COVID-19 global pandemic– and the political climate in Nigeria, Notore achieved several important milestones to position the company for a great future.
“First, was the disbursement of the N13.32 billion Afreximbank facility on 31st December 2019, which set the stage for the commencement of the Turn Around Maintenance program (TAM) for our Plant, to meet the objective of returning the facility to nameplate capacity of 500,000MT per annum of Urea.
“The outbreak of the COVID-19 pandemic resulted in supply chain and logistics interruptions, particularly with respect to acquisition of parts and spares for the TAM program, occasioned by the various restrictions and health advisories put in place by governments globally.
“During the year, we commenced ordering of critical long lead items and other materials for the implementation of the TAM program.
“By leveraging on our Oil and Gas Free Zone Developer Licensee status, the company took certain key steps during the year in furtherance of our plan to develop our 560 hectares industrial complex into a gas hub, as part of a gas monetization program and the promotion of an integrated logistics service provider to companies operating in West Africa, along the entire oil and gas value chain leading to further diversification of the company’s revenue stream.”
Speaking on outlook, he said, “I am pleased to share that the TAM program has commenced. The TAM is a critical activity required to improve the plant reliability and increase production output to meet and sustain its 500,000MT per annum nameplate design capacity.
“We expect significant improvement in the plant’s reliability and production output to meet and sustain this standard. It is expected that achieving this level of production output will not only lead to significant improvements in the company’s cash flows from operations, but also significant increases in revenues annually.
“With respect to fertilizer market dynamics, the Nigerian fertilizer demand remains robust and is expected to continue to grow considering the Federal Government’s strong and decisive policy focus on agriculture as one of the keys to unlock the diversification of the Nigerian economy.
“Production of Notore NPK fertilizers has ramped up, with major local market introduction achieved in 2020, which will lead to substantial NPK production and sales in the 2021 financial year.
”Sale of Notore seeds to Nigerian farmers has also continued in furtherance of our corporate vision to be a significant contributor to the development of Africa. Additionally, while leveraging the company’s seeds business, robust supply chain and distribution network, we intend to expand further into other products such as rice production.
During the recent dry season, we commenced the pilot program for Notore Rice, an integrated program which saw the successful completion of rice paddy production. In 2021, we expect to continue the pilot program followed by a test run of over 5,000 bags of high-quality Notore rice in the market.
“It is expected that these additional initiatives will further diversify the company’s revenue stream, boost profitability, and consolidate customers’ loyalty. Conclusion Our business has been faced with many challenges over the past year.
“However, Notore has indeed achieved several vital milestones to re-position the Company for a great future.
“As we look to the future post-TAM, the next phase of Notore’s growth will be focused on diversification, optimization, and profitability.
“Valued shareholders, it has been my pleasure to lead the team at Notore, and I would like to express my gratitude to our employees and partners for your hard work, dedication and commitment to the Notore brand, in spite of the challenges faced. I would also like to thank my fellow Directors.
“Your unwavering support fuels the growth and success of the organization, and I see our future with many more successes and great achievements.”
