Notore Petrochemical Industries Plc today held its first investor conference call, after listing on the Nigerian Stock Exchange (NSE) last week. The company had earlier released its results for the nine months ending June 2018.
Present during the call were the Group Chief Executive Officer Onajite Paul Okoloko, Group Chief Financial Officer (CFO) Femi Agbaje and Bolarin Tolujo Group Chief Financial Controller.
The company discussed several issues including its dividend policy and plans for the next financial year.
On Market Share
The company has an estimated 60% share of the Nigerian market. Notore currently sells all the fertilizer it produces in Nigeria. It also exports across the West African coast, as well as Europe, South America, and Central America.
On Insecurity, not a major issue
Okoloko also stated that the herdsmen crisis across parts of the country did not have a significant event in its sales.
On Why administrative expenses rose
The increase in expenses was due to the events leading to the company’s listing as well as an increase in staff costs and marketing during the offseason. Administrative expenses jumped from N3.2 billion in 2017 to N4.1 billion in 2018.
On Distribution Channels
The company is represented in 700 Local Government Areas in the country. It also has 70 major distributors who in turn sell to 3000 retailers. 56 commercial farms and off-takers account for 20% of its annual sales.
On Free Trade Zone
Notore expects improved tax efficiencies from the business. A gas hub will also be created, and there will be excess power available after the plant’s Turn Around Maintenance (TAM). A master plan is currently being developed and the FTZ should generate income in a year from now.
On Turn Around Maintenance (TAM)
Turn Around Maintenance is expected to be completed by the third quarter of 2019. A $37 million loan was obtained from the Africa Export-Import bank. The loan has a tenor of 7 years at an interest rate of 12%.
On New NPK Plant
The company’s new NPK plant is expected to commence production before the end of the year and has a production capacity of 2000 metric tonnes per day. The firm intends to use the plant to provide a wider variety of products. It also expects improved margins from the urea which will be blended into the NPK.
Price Outlook
Domestic fertilizer prices are expected to remain firm in the near term, but eventually inch up in tandem with international prices. Fertilizer prices tend to rise alongside crude oil prices because of the gas component.
Dividend Policy
Group CEO Onajite Okoloko stated that the company’s dividend policy would be discussed at its next board meeting.
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