Notore Chemical Industries Plc, has said that it expects to exceed its current urea production figures and also work on financial initiatives to reduce its finance cost.
This was even as the company recorded an operating profit of N2.99billion in Q1 2019 full year (FY), resulting in an increase of 412.4 per cent as against the operating profit of N0.58 billion recorded in Q1 2018 FY.
The urea company revealed that projected cost savings from the company’s leverage is expected to boost its profitability.
Furthermore, Notore said it believes that the current Federal Government policy on the fertilizer space and demand for NPK and NPK specialty blends are quite favourable for its business and will consequently be producing a significant quantity of NPK and NPK specialty blends this FY to boost its revenues.
Despite the positive operating profit, Notore recorded a loss of N93.35 million during the period because of its net finance cost of N3.09billion. The company’s revenue also decreased by N4.32 billion for the three month period ended 31st December 2018 i.e. Q1 2019 Financial Year (“FY”),compared to N5.99billion for the corresponding period in Q1 2018 FY.
According to a statement obtained by Daily Sun, the decline in revenue was largely due to plant down time caused by a maintenance programme on its facxilities during the period under review.
The statement further said the company sold all the urea products that was produced during the period into the domestic fertilizer market, adding that the fertilizer market is yet to reach its full potential even as the demand for urea and compound fertilizers, such as NPK, from the West African markets and neighbouring countries bordering the northern part of the country remained quite significant.
“Constant natural gas (main feedstock for producing urea fertilizer) supply has been one of Notore’s key strengths. However, Notore missed its Q1 2019 FY production target because of the maintenance program carried out during the same period. The maintenance program built in some reliability into the plant and Notore expects to enhance its plant reliability further when it carries out its turn-around maintenance (“TAM”) program later in the year.
Notore has secured the TAM fund, which should be disbursed this quarter; nevertheless, it has commenced the ordering of critical components of the items under the TAM scope in order to keep with the TAM schedule.” It said.