Notore Chemical Industries Plc has said the projected cost savings from its leverage is expected to boost profitability.
The firm said in a statement, “Furthermore, Notore believes that the current Federal Government policies in the fertiliser space and demand for NPK and NPK specialty blends are quite favourable for its business.
Its unaudited financial statement, which was made available to the Nigerian Stock Exchange on Wednesday, showed that it made a loss of N93.4m for the quarter ended December 31, 2018, down from the N1.96bn loss recorded in the corresponding period in 2017.
The firm posted an operating profit of N2.99bn for the period under review, compared to the N584m recorded in the same period in 2017.
An analysis of the financial statement showed that its finance costs increased from N2.54bn to N3.11bn.
The firm also recorded increases in its cost of sales and administrative expenses.
It recorded a 28 per cent decline in its revenue from sales of urea, ammonia and other chemicals, from N6bn in 2017 to N4.32bn in 2018.
However, the firm generated an income of N4.6bn from other sources other than its day-to-day activities, compared to the N74m that was recorded in the same period in 2017.
The firm said in a statement that the decline in its revenue was largely due to plant downtime caused by a maintenance programme on its plant during the period under review.
It said the fertiliser market in Nigeria during the period was robust as all the urea supplied into the domestic fertiliser market was sold.
The statement read in part, “Notore believes that the domestic fertiliser market is yet to reach its full potential. Furthermore, the demand for urea and compound fertilisers, such as NPK, from the West African markets and neighbouring countries bordering the northern part of the country is also quite significant.”
The firm said its working capital improved as a result of the refinanced short-term facilities of N49.5bn to long-term seven-year facilities last financial year.
It said it expected to exceed its 2018 urea production figures and also work on financial initiatives to reduce its finance cost.
“Consequently, Notore will be producing a significant quantity of NPK and NPK specialty blends this year to boost its revenues,” it added.