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Notore Chemical Industries Plc at the weekend released its 2022 half-year result, posting revenue of N26.2 8 billion as against N9.43 billion reported in nine months of 2021 and profit before tax of N2.6billion in H1 2022 from N15.85billion loss reported in nine months of 2021.
Nigeria’s fertiliser-producing company performance in the period under review showed impressive earnings record from its 500,000 Metric Tonne Urea Plant and a 600,000 Metric Tonne of NPK Blending Plant in Onne, Rivers State, Nigeria.
Over the last five years, it has wallowed in debts and suffered severe revenue declines as it failed to produce at full capacity.
However, in 2019, the company embarked on major turnaround maintenance of its plant which it completed in 2021 after some COVID-19 induced delays.
A breakdown of its revenues during the period revealed that production Urea and other chemicals grew by 311.07 per cent to N24.97billion in six months of 2022 from N6.07billion reported in nine months of 2021, while revenue from NPK dropped to N639.46million in six months of 2022 from N2.27billion reported in nine months of 2021.
Since its plants are more reliable and production output has massively improved, delivery of Urea and other chemicals amid increasing demand for fertiliser within and outside Nigeria is also high even as Russia/Ukraine war cast a dark cloud over its outlook.
Analysis by geographical location revealed that revenue within Nigeria grew significantly by 27.9per cent to N11.57billion in six months of 2022 from N9.05billion reported in nine months of 2021, while revenue outside Nigeria moved from N388.8million in nine months of 2021 to N14.72billion in six months of 2022.
The company has also stepped-up efforts to diversify its revenue base with its installed 2,000 metric tons per day NPK blending capacity. They are also ramping up their seeds business producing about 5,000 50KG bags of rice in 2021.
Despite all these positives, the company’s biggest challenge is its external debt obligations. According to the information contained in its latest results, Notore’s debt burden is currently estimated at about N130 billion.
The company stated that the Dollar portion of the loans increased slightly by 0.81per cent from 2021 financial year majorly from the impact of the Naira devaluation on dollar -denominated loans while the proportion of long-term loans to total loans increased to 85 per cent from 62 per cent in 2021FY, resulting from the restructuring of short-term loans to long term as part of the financial initiatives taken by the company.
Compared to net equity of about N55.6 billion, the company is in substance owned by the banks and not the shareholders.
