Notore Chemical Industries Plc has recorded group loss after tax (LAT) of N114.2billion for the year ended December 31, 2023, a remarkable increase from loss of N7.1billion in year 2022.
This is even as the fertiliser and agro-allied company’s revenue decreased to N21.55 billion from N32.3 billion in 2022 financial year.
Notore Chemical also reported basic Loss Per Share (LPS) (Naira) of 70.87 from a low of 4.4 in 2022, according to the results at the Nigerian Exchange Limited (NGX). The company’s share price remains at N62.5 per share.
The year 2023 proved to be a challenging period for Notore, characterised by the devaluation of the naira, significant forex volatility, and the rising cost of funds driven by changes in the Monetary Policy Committee (MPC) rates,” Notore said in a statement.
Amid negatives in 2023, the company announced significant progress in its equity raise transaction following approvals from the board of directors and shareholders. The subscription offer is expected to result in a substantial capital injection of over N105 billion into the company.
During a recently concluded extraordinary general meeting, shareholders provided necessary approvals for the company’s financial prosperity. These approvals pave the way for a substantial financial boost for various needs, the company said, noting that upon completion of the transaction, the injection of over N105 billion into Notore will bolster operational capabilities.
According to Group Managing Director, Ohis Ohiwerei, the company is: “Focused on navigating economic conditions and optimistic about the future. We will leverage our strengths to drive sustainable growth and value creation for stakeholders.”
Auditors express worry
Meanwhile, external auditors at Deloitte & Touche have expressed concerns that continuing losses by the company raise significant doubts about its ability to remain in the business space.
In its audit report for the 2023 business year, released earlier this month at the Nigerian Exchange (NGX), the auditors stated that there were “material uncertainty related to going concern” status of the company.
The external auditors noted that Notore incurred net loss of N114.3 billion in 2023 as against N7.2 billion in 2022, with accumulated losses rising from N38.9 billion in 2022 to N148.6 billion in 2023.
The report also noted that the group had net current liabilities grew to N130.1billion in 2023 compared with N72.1 billion in 2022
“These events or conditions, along with other matters as set forth in Note 30, indicate that a material uncertainty exists that may cast significant doubt on the group and the company’s ability to continue as a going concern,” Deloitte & Touche stated.
The group’s huge indebtedness to banks also impacted its performance. Finance costs jumped from N19.18 billion to N23.45 billion. Exchange difference on bank borrowings leapt from N4.08 billion in 2022 to N67.69 billion in 2023. With these, loss before tax jumped from N16.04 billion to N114.18 billion. After taxes, net loss stood at N114.25 billion in 2023 as against N7.16 billion in 2022.
While total assets rose from N279.21 billion to N352.45 billion, shareholders’ funds halved from N75.38 billion in 2022 to N42.81 billion in 2023.
Providing further clarity on the auditors’ concern, the board of the company stated that there were also concerns that the timing of the approval of the Securities and Exchange Commission (SEC) to finalise the equity raise process to enable the company to access the equity funds deposited by the new investor in the escrow account in Providus Bank Limited is uncertain due to procedural delay.
The report also noted that the group and the company’s ability to retain its customer base when they become fully operational due to long year of non-production and sales which may negatively impact the recoverability of their market share.
It also expressed worried that the continued support of gas suppliers and the finalisation of repayment plans to settle their outstanding payments to mitigate interruption in gas supply.
