By Dipo Olowookere
The Group Deputy Managing Director of Notore Chemical Industries Plc, Mr Ohis Ohiwerei, has assured that the company will take various steps to boost profitability in the current financial year.
In a statement signed by him, the company’s executive said parts of these strategies towards achieving this goal include exploring various financial initiatives to reduce the finance cost and diversifying revenues to boost profitability.
He described the fertiliser market in Nigeria in the first quarter of the year as robust as Notore sold all the urea that it produced during the period in both domestic and international fertilizer markets.
According to him, constant natural gas (main feedstock for producing urea fertilizer) supply has been one of Notore’s key strengths, noting that the firm was 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.
He noted that 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.
“Notore believes that the domestic fertiliser market is yet to reach its full potential. Furthermore, the demand for urea and compound fertilisers, such as NPK, from the West African markets and neighbouring countries bordering the northern part of the country is also quite significant,” he stated.
On the outlook for the year, Mr Ohiwerei said, “Notore expects to exceed its 2019 FY urea production figures and is also working on various financial initiatives to reduce its finance cost. The projected cost savings from Notore’s deleverage is expected to further boost its profitability, in addition to a forecasted increase in production as TAM progresses.”
“Furthermore, Notore believes that the current federal government policies in the fertiliser space and demand for NPK and NPK specialty blends are quite favourable for its business, consequently, Notore will be producing a significant quantity of NPK and NPK specialty blends this FY to diversify its revenue,” he added.
Business Post reports that in the first quarter of 2020, Notore increased its revenue to N8.18 billion from N4.32 billion in the same quarter of 2019 as a result of improvement in the plant’s reliability. This led to the increase in the urea production volumes by 83 percent to 80,777MT from 44,076MT in Q1 2019.
However, the operating profit went down by 39 percent to N2.04 billion from N3.34 billion as a result of a decline in other income by 78 percent. In the period under review, Notore recorded a loss of N1.39 billion and a net finance cost of N3.43 billion.
