No respite for Notore Chemical Industries, manufacturer of agro-allied products such as urea, NPK, ammonia among others, as its losses continued to deepen at half year 2024. From a loss after tax of N114.25 billion in FY 2023, Notore again posted a loss after tax of N130 billion as at June 2024 in comparison to a loss after tax of N38 billion as of June 2023. The heavy losses that Notore Chemical suffered were caused in part by a crash in the sale of products such as NPK, urea as well as the absence of revenue from infrastructure services.
Another challenge the company faced during the period was a huge finance cost it incurred during the period. From a N28.79 billion finance cost within the first six months of 2023, the same item surged by 262.6 percent to N104.42 billion within the first six months of 2024.
Notore Chemical Industries Plc was incorporated in Nigeria on 30 November 2005 to manufacture and deal in nitrogenous fertilizers and all substances suited to improving the fertility of soil and water. The company fully rehabilitated a 500,000 metric tonne urea plant in Onne, Rivers State, Nigeria and commenced commercial production in the first quarter of 2010.
It is a subsidiary of Notore Chemical Industries (Mauritius) Limited. The principal activities of the company are to manufacture, treat, process, produce, supply and deal in nitrogenous fertilizer and all substances suited to improving the fertility of soil and water.
Specifically, Notore produces Urea, NPK 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. At the same time, the NPK Blending Plant has a production capacity of 2,000 metric tons per day. The Group currently supplies and sells its fertilizer products in all thirty-six (36) States and Abuja, the Federal Capital Territory.
It also trades and exports its manufactured fertilizer products to West Africa, South Africa, South America, and Europe.
In terms of income, Notore generated N12.33 million from the sale of NPK (Nitrogen, Phosphorus, and Potassium) fertilizers. This compares to N920.73 million the same firm realised as earnings from the sale of the same product, amounting to a decline of 98.66 percent.
Notore earned N206.95 million as revenue from the sale of urea and other chemicals, which fell short of the N6.43 billion the firm made as at half year 2023, representing a decline of 96.8 percent.
Revenue from infrastructure services was down by 100 percent as the firm did not generate any revenue from the service. As at June 2023, it realised N476.49 million from this service.
While its revenue from within Nigeria declined by 94.7 percent from N7.67 billion as of June 2023 to N407.69 million as of June 2024, its revenue from overseas crashed by 100 percent, as no foreign sales were made during the period. As of June 2023, Notore realised N247.40 million from foreign sales.
Exchange differences on bank borrowings accounted for the bulk of its finance cost. This item amounted to N80.19 billion from January to June 2024 compared to N14.05 billion in the corresponding period of 2023. Interest and fees on borrowings also gulped N24.22 billion from January to June 2024 compared with N14.74 billion as of June 2023.
In spite of the impact exchange rate devaluation and hike in the benchmark interest have had on companies operating in Nigeria, the rising inflationary pressures in the country, prompted the apex bank in the country, to further hike the benchmark interest rate which it raised to 26.75 percent at its recent Monetary Policy Committee meeting.
This was in response to inflation that surged 34.19 percent with the food inflation at 40.87 percent.
“The Committee was mindful of the effect of rising prices on households and businesses and expressed its resolve to take necessary measures to bring inflation under control. It re-emphasized its commitment to the Bank’s price stability mandate and remained optimistic that despite the June 2024 uptick in headline inflation, prices are expected to moderate in the near term,” Olayemi Cardoso, CBN governor said at the end of the MPC meeting.
