Economy
Notore Chemical Makes Move to Address Red Flag Raised by Auditors
By Dipo Olowookere
This week, precisely on Tuesday, December 31, 2019, the Nigerian Stock Exchange (NSE) posted the audited financial statements of Notore Chemical Industries Plc for its full year ended September 30, 2019 on its online platform.
In the brief analysis of the results by Business Post, it was observed that the revenue generated by the firm in the period under review depreciated to N21.4 billion from N26.8 billion, while the gross profit reduced to N4.0 billion from N9.6 billion, with operating profit going down to N3.4 billion from N9.2 billion.
In the period under review, the company declared a loss before tax of N10.3 billion against N3.5 billion a year earlier and a loss after tax of N5.8 billion in contrast to N1.9 billion 12 months ago.
The firm enjoyed a deferred income tax of N4.5 billion in the period under consideration, higher than the N1.6 billion it similarly had in the corresponding period of 2018. A look at the earnings per share (EPS) showed a -N3.57 compared with -N1.18 in the previous financial year.
One of the things that caught the attention of Business Post in the results is the report of the auditors, PwC, which said Notore Chemical may be unable to realise their assets and discharge their liabilities in the normal course of business.
“We draw attention to Note 29 to the consolidated and separate financial statements, which indicates that the group and company incurred net losses of N5.75 billion and N5.68 billion respectively for the year ended September 30, 2019 and, as of that date, the group and company had net currency liabilities of N37.03 billion and N37.71 billion respectively.
“As stated in Note 29, these events or conditions, along with other matters as set forth in Note 29, indicate that a material uncertainty exists that may cast significant doubt on the group and company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter,” the auditors stated.
A check on the Note 29 showed that the company agreed with the red flag raised by PwC, but said it was putting up measures to return the company to profitability and improve working capital.
“Management has embarked on a Turn Around Maintenance (TAM) of its production plant and equipment to improve its reliability and increase production output. The TAM programme will involve replacement/rehabilitation of some critical production equipment, stock up of some critical equipment spares and acquisition of a back-up 44 megawatts gas turbine,” the firm said in the financial statements.
“This will be funded by a seven-year tenured loan of $37 million to be obtained from the African Export-Import Bank. The approval for disbursement of the loan has been obtained,” it added.
Notore Chemical said some equipment in the TAM programme have already been purchased and installed using the company’s operating funds, while some other critical equipment with long lead times have been ordered and are awaiting delivery.
“The early works done under the TAM programme have begun to have some positive impact on plant reliability and sustained production, as the plant recorded a remarkable landmark achievement of uninterrupted round the clock operations of 100 consecutive days on December 15, 2019. This is the longest period of uninterrupted consecutive plant operations achieved in the history of the company,” it further said.
It further said the TAM programme is estimated to last a period of 12 months with completion time set for end of Q3 of 2020, adding that the TAM programme, once completed, is expected to improve significantly the plant’s reliability and production output to meet and sustain its 500,000 MT per annum design nameplate capacity.
“Achieving this level of production output will not only lead to significant improvements in the Group and company cashflows from operations, but also significantly increase annual revenues post the TAM programme,” the Note 29 pointed out.
“The directors are of the firm belief that upon implementation of the plans mentioned above, there would be significant reduction in the company’s debts, whilst also improving the reliability of the plant, thereby returning the company to profitability,” it added.
On Friday, Notore Chemical, in a disclosure, said the TAM programme is expected to “also increase reliability index from the current level of 67 percent to 95 percent” especially with the acquisition of N13 billion loan facility from African Export-Import Bank and with the objective “to accomplish the maintenance activities within a period of 30-day production to production.”
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited witnessed Santa Claus rally on Wednesday after it closed higher by 0.12 per cent.
Strong demand for Nigerian stocks lifted the All-Share Index (ASI) by 185.70 points during the pre-Christmas trading session to 153,539.83 points from 153,354.13 points.
In the same vein, the market capitalisation expanded at midweek by N118 billion to N97.890 trillion from the preceding day’s N97.772 trillion.
Investor sentiment on Customs Street remained bullish after closing with 36 appreciating equities and 22 depreciating equities, indicating a positive market breadth index.
Guinness Nigeria chalked up 9.98 per cent to trade at N318.60, Austin Laz improved by 9.97 per cent to N3.20, International Breweries expanded by 9.85 per cent to N14.50, Transcorp Hotels rose by 9.83 per cent to N170.90, and Aluminium Extrusion grew by 9.73 per cent to N16.35.
On the flip side, Legend Internet lost 9.26 per cent to close at N4.90, AXA Mansard shrank by 7.14 per cent to N13.00, Jaiz Bank declined by 5.45 per cent to N4.51, MTN Nigeria weakened by 5.21 per cent to N504.00, and NEM Insurance crashed by 4.74 per cent to N24.10.
Yesterday, a total of 1.8 billion shares valued at N30.1 billion exchanged hands in 19,372 deals versus the 677.4 billion shares worth N20.8 billion traded in 27,589 deals in the previous session, implying a slump in the number of deals by 29.78 per cent, and a surge in the trading volume and value by 165.72 per cent and 44.71 per cent apiece.
Abbey Mortgage Bank was the most active equity for the day after it sold 1.1 billion units worth N7.1 billion, Sterling Holdings traded 127.1 million units valued at N895.9 million, Custodian Investment exchanged 115.0 million units for N4.5 billion, First Holdco transacted 40.9 million units valued at N2.2 billion, and Access Holdings traded 38.2 million units worth N783.3 million.
By Adedapo Adesanya
Nigerian food and beverage company, Rite Foods Limited, has extended warm Yuletide greetings to Nigerians as families and communities worldwide come together to celebrate the Christmas season and usher in a new year filled with hope and renewed possibilities.
In a statement, Rite Foods encouraged consumers to savour these special occasions with its wide range of quality brands, including the 13 variants of Bigi Carbonated Soft Drinks, premium Bigi Table Water, Sosa Fruit Drink in its refreshing flavours, the Fearless Energy Drink, and its tasty sausage rolls — all produced in a world-class facility with modern technology and global best practices.
Speaking on the season, the Managing Director of Rite Foods Limited, Mr Seleem Adegunwa, said the company remains deeply committed to enriching the lives of consumers beyond refreshment. According to him, the Yuletide period underscores the values of generosity, unity, and gratitude, which resonate strongly with the company’s philosophy.
“Christmas is a season that reminds us of the importance of giving, togetherness, and gratitude. At Rite Foods, we are thankful for the continued trust of Nigerians in our brands. This season strengthens our resolve to consistently deliver quality products that bring joy to everyday moments while contributing positively to society,” Mr Adegunwa stated.
He noted that the company’s steady progress in brand acceptance, operational excellence, and responsible business practices reflects a culture of continuous improvement, innovation, and responsiveness to consumer needs. These efforts, he said, have further strengthened Rite Foods’ position as a proudly Nigerian brand with growing relevance and impact across the country.
Mr Adegunwa reaffirmed that Rite Foods will continue to invest in research and development, efficient production processes, and initiatives that support communities, while maintaining quality standards across its product portfolio.
“As the year comes to a close, Rite Foods Limited wishes Nigerians a joyful Christmas celebration and a prosperous New Year filled with peace, progress, and shared success.”
By Adedapo Adesanya
The Naira closed the pre-Christmas trading day positive after it gained N6.61 or 0.46 per cent against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Wednesday, December 24, trading at N1,443.38/$1 compared with the previous day’s N1,449.99/$1.
Equally, the Naira appreciated against the Pound Sterling in the same market segment by N1.30 to close at N1,949.57/£1 versus Tuesday’s closing price of N1,956.03/£1 and gained N2.94 on the Euro to finish at N1,701.31/€1 compared with the preceding day’s N1,707.65/€1.
At the parallel market, the local currency maintained stability against the greenback yesterday at N1,485/$1 and also traded flat at the GTBank forex counter at N1,465/$1.
Further support came as the Central Bank of Nigeria (CBN) funded international payments with additional $150 million sales to banks and authorised dealers at the official window.
This helped eased pressure on the local currency, reflecting a steep increase in imports. Market participants saw a sequence of exchange rate swings amidst limited FX inflows.
Last week, the apex bank led the pack in terms of FX supply into the market as total inflows fell by about 50 per cent week on week from $1.46 billion in the previous week.
Foreign portfolio investors’ inflows ranked behind exporters and the CBN supply, but there was support from non-bank corporate Dollar volume.
As for the cryptocurrency market, it witnessed a slight recovery as tokens struggled to attract either risk-on enthusiasm or defensive flows.
The inertia follows a sharp reversal earlier in the quarter. A heavy selloff in October pulled Bitcoin and other coins down from record levels, leaving BTC roughly down by 30 per cent since that period and on track for its weakest quarterly performance since the second quarter of 2022. But on Wednesday, its value went up by 0.9 per cent to $87,727.35.
Further, Ripple (XRP) appreciated by 1.7 per cent to $1.87, Cardano (ADA) expanded by 1.2 per cent to $0.3602, Dogecoin (DOGE) grew by 1.1 per cent to $0.1282, Litecoin (LTC) also increased by 1.1 per cent to $76.57, Solana (SOL) soared by 1.0 per cent to $122.31, Binance Coin (BNB) rose by 0.6 per cent to $842.37, and Ethereum (ETH) added 0.3 per cent to finish at $2,938.83, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
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