Notore announces operating profit of N9.9 billion in 15 months

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Agribusiness and chemicals leader Notore Chemical Industries Plc reported an operating profit of N9.9 billion in its audited results for the 15 months ended December 31, 2021.

In a statement signed by its Managing Director and Group CEO, Ohis Ohiwerei, the company said the period was dedicated to rebuilding and repositioning Notore to deliver on its promise to champion the African Green Revolution.

According to him, “Although this was a very difficult time for Notore, he completed the TAM program during the period. The TAM was a critical step taken by the company to address the drawbacks affecting the stability and the reliability of its manufacturing plant, a key measure to increase production in order to reach and maintain its plant’s nominal capacity of 500,000 MT per year.

“The completion of TAM, which occurred during the period, has improved reliability and will result in a significant increase in the Company’s production. This achievement will lead to increased operating cash flow for the Company, strengthen its debt service capacity and generate substantial increases in revenue going forward, a critical key to returning the Company to profitability over the course of the year. exercise in progress.

He noted that the company has taken steps to further diversify its revenue sources, adding that production of its Notore NPK fertilizer blend has continued to increase in terms of production and sales, with increases expected in periods coming.

He said, “Leveraging its installed NPK blending capacity of 2,000 metric tons per day and its successful introduction of the Notore NPK fertilizer brand, the company is well positioned for significant revenue and flow growth. cash in the future.

“Furthermore, while leveraging the company’s seed business, strong supply chain and distribution network, the company is further expanding its product offering by moving into rice production. The company has conducted two pilot rice programs in preparation for the planned launch of Notore rice as a product line in 2023. These additional initiatives are expected to further diversify the company’s revenue stream, significantly increase revenue, increase profitability and will contribute considerably to its cash flow.

Ohiwerei said Notore had taken steps in its bid to improve working capital and return to profitability, saying the company was in discussions with its bankers for further restructuring of a substantial portion of the company’s short-term loans. company in fixed long-term loans. .

“When completed in the second quarter of 2022, the loan restructuring agreements are expected to significantly reduce its financial costs and free up cash flow to increase working capital. The company plans to restructure its capital structure by raising equity in the fourth quarter of 2022. Proceeds will be applied to deleverage its balance sheet to achieve an optimal mix of debt and equity and to fund a portion of planned expansion activities to further reposition the company for growth.

Also read: BUA Foods, Notore, UPDC on track to sell controlling shares

“The company expects to implement a bond issuance program in the second quarter of 2023 after completing its capital increase program and has entered into discussions with a credit rating agency and other financial advisors. Bond proceeds will be used to further reduce and restructure its existing bank debt to reduce financial costs and free up cash flow to increase working capital.

Regarding the outlook for the year, he expressed optimism about the growth of the Nigerian fertilizer sector, noting that the demand for Nigerian fertilizers remains robust and is expected to continue growing, given the strong and decisive political focus. of the federal government on agriculture as one of the keys. unlock the diversification of the Nigerian economy. The company is well positioned to take full advantage of this.

“With the TAM program now complete, Notore expects a significant improvement in reliability and production from its plant. This, together with other measures to reposition Notore, should increase revenues, improve cash flow and facilitate a gradual return to profitability in the current fiscal year,” he said.
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