Notore Chemical Industries Plc (NSE ticker- NOTORE) financial woes worsened in 2020, as the company’s cost of sales surpassed its revenue from contracts with customers, according to the Consolidated and Separate Statements of Profit or Loss and Other Comprehensive Income for the year ended 30 September 2020 released by the company.
Notore has reported losses for three consecutive financial years, with the highest loss recorded in 2020.
In the past five years, Notore Chemical Industries Plc posted a profit only in 2017.
Revenue from contracts with customers declined by 12.23% to N18.80 billion in 2020 from N21.42 billion in 2019. The company’s cost of sales amounted to N21.68 billion in 2020 thus resulting in a gross loss of N2.88 billion against a gross profit of N3.96 billion in 2019.
Notore Chemical Industries Plc spent N5.92 billion as Administrative expenses. The company, however, reported N18.68 billion as “other income” (N16.73 billion registered from Fair value adjustment on investment property).
The “other income” earning was not enough to cover Notore’s finance cost of N23.41 billion during the year in review. The finance cost rose by 71.01% from the N13.69 billion it registered in 2019.
Notore Chemical Industries Plc reported a Loss before income tax of N13.92 billion up from N10.25 billion posted in 2019.
Thanks to a tax credit of N7.53 billion it received in 2020 (2019 tax credit – N4.50 billion), its loss for the year settled at N6.40 billion up from N5.75 billion loss in 2019. Notore reported negative earnings per share of N3.97 in 2020.
A review of the balance sheet showed that Notore Chemical Industries Plc increased its total assets by 12.30% to N220.76 billion in 2020.
Major changes in the asset column
- Property, plant and equipment declined by over 7 billion naira to N145.28 billion
- Investment property rose to N53.17 billion from N30.77 billion in 2019.
- Trade and other receivables jumped to n11.32 billion from N1.08 billion in 2019.
Just 28.6% of the company’s total is financed by equity (N63.10 billion) while 71.4% is financed by its liabilities (N157.66 billion – made up of N105.56 non-current liabilities and N52.10 billion current liabilities).
The total equity of Notore Chemical Industries Plc declined by 9.29% whereas its total liabilities rose by 24.13% during the year.
The long-term borrowing rose to N89.67 billion in 2020 from N53.87 billion in 2019 whereas short-term borrowing declined to N18.68 billion from N26.10 billion in 2019. On the other hand, trade and other payables rose to N32.08 billion in 2020 from N21.97 billion in 2019.
Notore Chemical Industries Plc has a retained loss of N29.12 billion up from N25.90 billion loss in 2019.
The cash flow statement is not looking good either as the company reported a negative Cash and cash equivalents at end of the year – minus N2.93 billion (minus N2.63 billion in 2019).
Notore used N7.08 billion in its operating activities, used N3.80 billion in its investing activities and generated N10.58 billion from financing activities due to proceeds from borrowings and bank overdraft.
The equity price of NOTORE has remained unchanged at N62.5 per share since its listing on the Nigerian Stock Exchange due to investors’ lack of appetite for the shares.
About Notore Chemical Industries Plc
Notore Chemical Industries Plc was incorporated in Nigeria on 30th November 2005, as a private limited liability company, and is domiciled in Nigeria. Its registered office address is Notore Industrial Complex, Onne, River State, Nigeria. On 13th June 2014, the Company was re-registered as a public limited liability company and was listed on the Main Board of the Nigerian Stock Exchange on 2nd August 2018.
Also, in December 2017, the company was granted a free zone developer status by the Oil and Gas Free Zones Authority. Similarly, the Company has been obtaining annual free zone enterprise licence from the Oil and Gas Free Zones Authority with the last licence obtained covering twelve months from 1 January 2020 to 31 December 2020.
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. The Company has a 500,000 metric tonne Urea Plant in Onne, Rivers State, Nigeria.
In 2020, Notore Chemical Industries Plc recorded 100 continuous run-days of the Ammonia and Urea Plants from 7th September to 15th December 2019. Another streak of 85 continuous run-days was also achieved between 15th February 2020 and 9th May 2020 during which 47,758MT of Ammonia was produced.
General Dr. Yakubu Gowon, GCFR is the company Chairman while Mr. Onajite P. Okoloko is it’s Managing Director/CEO.
By: Ifunanya Ikueze