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 Aduragbemi Omiyale
The Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI) for the Nigerian private sector in July 2026 contracted to 52.5 points from 53.4 points in June 2026, a statement made available to Business Post has shown.
This occurred despite the business environment sustaining its growth last month, with an increase in new orders experienced, as inflationary pressures softened, and output and employment modestly rising.
The Head of Equity Research West Africa at Stanbic IBTC Bank, Mr Muyiwa Oni, said the PMI indicated that the private sector recorded its slowest since March 2026, as businesses also increased their input purchasing activity to keep up with current demand requirements and prepare for future workloads.
“Nigerian businesses reported improved customer demand in July while better pricing and new product launches also helped them to capture new orders arising from the increase in demand. These factors helped to keep the private sector activity in an expansionary territory, although this moderated when compared to June,” he was quoted as saying.
It was stated that while input costs increased at their slowest pace in five months, panellists reported higher costs for fuel and raw materials. Selling prices also softened in line with the picture for input costs in July.
Headline inflation eased slightly to 15.91 per cent y/y in June from 15.93 per cent y/y in May, snapping three consecutive months of price increases.
Although July inflation is likely to be higher m/m, it is expected to print lower, likely at 15.72 per cent y/y, primarily driven by favourable base effects from the corresponding period of last year, because there are no expectations of the magnitude of m/m inflation witnessed in July 2025 (1.99 per cent) to materialise this year.
“We retain our 2026 growth forecasts at 4.1 per cent as we see the oil sector growing by 3.45 per cent y/y in 2026, from 8.50 per cent y/y in 2025, while the non-oil sector is likely to grow by 4.11 per cent y/y, from 3.71 per cent y/y in 2025.
“The risks to our outlook include country-wide insecurity which may constrain food production, exchange rate pressures resurfacing, extreme-weather related conditions and higher fertiliser prices impacting crop yield, and a volatile global environment which may affect sentiment and constrain capital flows,” Mr Oni noted.
By Adedapo Adesanya
Sahara Upstream, a Nigeria-focused crude producer, has deployed a new 380,000-barrel tanker to boost exports from the OML 18 block as part of a wider push by domestic operators to invest in infrastructure and lift output and exports for Africa’s biggest oil producer.
The MT D Adesanya, which can hold more than 62,000 cubic metres of crude, will operate alongside the MT D Bayero, receiving crude from shuttle vessels at Bonny Anchorage, one of Nigeria’s main crude export hubs, before transferring it to the FSO Cawthorne storage facility.
Sahara said the tanker would help cut turnaround times, currently about 30 to 48 hours, and support a planned 50 per cent increase in exports from the block’s current level of about 950,000 barrels per month.
The block currently produces about 36,000 barrels per day, according to data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), with Sahara targeting output of 60,000 barrels per day.
OML 18 is one of the Niger Delta’s oldest producing assets. It began production in 1970 and contains an estimated 1.5 billion barrels of oil equivalent in reserves.
Shell, Total and Eni sold their combined interests to Eroton in 2015 as part of a broader shift toward domestic ownership in Nigeria’s upstream sector.
This development comes as Sahara Upstream is deepening its exploration and production footprint through Asharami Energy Limited (AEL), its upstream E&P business, which says it is targeting 350,000 barrels of oil per day by 2030 through its subsidiary, Enageed Resources Limited (ERL).
The growth target comes as AEL also marks a major safety milestone, achieving 6 million Lost Time Injury (LTI)-free man-hours in its OML-148 operations — reinforcing the company’s commitment to operational excellence and safety leadership.
According to Asharami Energy, the milestone reflects its ability to execute complex operations safely, in line with Sahara’s Beyond XXX vision, which builds on the group’s 30-year legacy of responsible enterprise while marking its next chapter of impact, innovation, and sustainable growth.
The developments position Sahara Upstream and its subsidiaries among the domestic operators driving increased investment in Nigeria’s oil and gas infrastructure, as the group works to scale up production and exports for Africa’s biggest oil producer.
By Aduragbemi Omiyale
One of the leading energy firms in Nigeria, Aradel Holdings Plc, has expressed its desire to optimise its enlarged portfolio and improve operational efficiency in the second half of 2026.
The company is planning to build on the success it recorded in the first half of the year, where it grew its revenue by 577 per cent to N2.5 trillion from N368.1 billion in H1 2025.
The significant rise in earnings was driven by higher production volumes together with stronger realised crude oil and gas prices, with the average at $90.4/bbl and $2.08/mmscf, respectively.
In the period under review, the Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) increased by 688 per cent to N1.4 trillion from N176.4 billion in the corresponding period of last year, while the operating profit surged by 789 per cent to N1.1 trillion from N118.6 billion due to higher revenue and crude handling income at N149.8 billion, partly offset by underlift cost and general and administrative costs.
The net cash generated from operations was N975.6 billion between January and June 2026 versus N140.8 billion in the same period of 2025, reflecting the cash generation of the enlarged organisation.
The net debt contracted by 70 per cent on a year-to-date basis to N46.5 billion from N475.1 billion as of December 31, 2025.
Aradel, in the period under consideration, improved its post-tax profit by 30 per cent to N191.0 billion from N146.4 billion, a development that impressed its chief executive, Mr Adegbite Falade, who said, “A firmer price environment supported performance, generating net cash from operating activities of N975.6 billion and a closing cash balance of N1.7 trillion.”
“Our enlarged portfolio provides more opportunities to generate stronger cash flow and returns for shareholders and unlocking that potential is our main focus.
“We reaffirm our full year production guidance of 110 – 140 kboepd and remain committed to operating responsibly in a changing energy landscape and to delivering lasting value for our stakeholders,” he stated.
