By Notore May 1, 2019
NOTORE REPORTS H1, 2019 FINANCIAL RESULTS
Reports ₦4.63 billion Operating Profit for the Six-Month Period Ended 31 March 2019
Presented below is the financial summary of Notore Chemical Industries Plc (“Notore”) Six Month Ended 31st March 2019 Unaudited Financial Statements.
Group Financial Highlights
Notore recorded revenue of ₦12.68billion for the Six-Month Period Ended 31st March 2019, compared to ₦15.17billion for the corresponding period in H1 2018 FY resulting in a 16.03% y-o-y decline. The decline was mainly due to plant downtime during the period under review. The Turn-around maintenance (“TAM”) program activities are expected to be completed by Q1 2020, after which the plant will operate at its nameplate capacity. Notore’s cost of sales margin variation over the two periods, H1 2019 and H1 2018 FY was minimal at 80bps increase, because natural gas, which constitutes 90% of the input cost, excluding plant depreciation, has a fixed unit price under a 20-year gas contract.
Notore increased its Operating Profit from ₦0.11billion in H1 2018 FY to ₦4.63billion in H1 2019 FY, resulting in a 4,251% growth. The growth was largely attributable to the recognition of asset revaluation gains. Despite the positive Operating Profit, Notore recorded a loss of ₦1.94billion during the period because of its net finance cost of ₦6.57billion.
Market & Operational Developments
Nigerian fertilizer demand is quite robust and is expected to continue to grow because of the Federal Government’s agenda to use agriculture as one of the keys to unlock the diversification of the Nigerian economy. 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 & Agriculture Organization. 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 during the period under review.
Outlook for the Year
Notore expects to exceed its 2018 FY urea production figures in 2019 FY. The current Federal Government policies in the fertilizer 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 boost its revenue as well as diversify it from urea fertilizer. To enhance profitability, Notore is working on financial initiatives to reduce its finance cost considerably.
Investor Relations Contact
Seyi Odeinde
+234 805 339 1212
Media
Ngozi Mba
+234 805 339 1215
About Notore Chemical Industries Plc
Notore is a vertically integrated agro-allied and chemicals business situated in Onne (near Port Harcourt), Rivers State in South-South Nigeria and is engaged primarily in the production and sale of fertiliser products. Notore’s vision is to be the number one company by market share and profitability in our chosen businesses and a significant contributor to the development of Africa and our mission is to enhance the quality of life.
The Group’s current business comprises fertiliser production, supply and trading of fertiliser, and power. The Group’s primary fertiliser products are granular Urea and Ammonia. The Group operates from its Onne Complex in the heart of the Niger Delta, Africa’s most prolific oil and gas producing region. The Onne Complex is located within the Notore Chemical Industries Free Zone, which provides significant tax benefits and advanced logistics solutions for international distribution of products.
The Onne Complex comprises of approximately 560 hectares of land owned by the Group with a 2km of waterfront including the Notore Port and a dedicated jetty (with a capacity to accommodate vessels with a maximum volume of between 25,000 MT and 35,000 MT) owned by the Group. The Notore Port gives the Group easy access to the Atlantic Ocean for easy import of raw materials and export of the Group’s products.
The Group produces Urea and Ammonia and owns a Urea producing plant in Onne, Rivers State with a current annual design production capacity of approximately 500,000 MTPA of Urea and 330,000 MTPA of Ammonia. The Group currently supplies and sells its fertiliser products in all thirty-six (36) States and Abuja, the Federal Capital Territory. The Group trades and exports its manufactured fertiliser products to West Africa, South Africa, South America, and Europe.
For more information visit www.notore.com
Disclaimer
This announcement contains or will contain forward-looking statements which reflect management’s expectations regarding the Company’s future growth, results of operations, performance, business prospects and opportunities. Wherever possible, words such as “anticipate”, “believe”, “expects”, “intend” “estimate”, “project”, “target”, “risks”, “goals” and similar terms and phrases have been used to identify the forward- looking statements. These statements reflect management’s current beliefs and are based on information currently available to management. Certain material factors or assumptions have been applied in drawing the conclusions contained in the forward-looking statements. These factors or assumptions are subject to inherent risks and uncertainties surrounding future expectations generally. Notore Chemical Industries Plc cautions readers that several factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking statements. These factors should be considered carefully, and undue reliance should not be placed on the forward-looking statements. For additional information with respect to certain of these risks or factors, reference should be made to the Company’s disclosure materials filed from time to time with Securities & Exchange Commission in Nigeria. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether because of new information, future events or otherwise.