Nigerian Equity Market
L – R Mr. Haruna Jalo-Waziri, Managing Director/CEO, Central Securities Clearing System (CSCS) Plc; Mr. Oscar N. Onyema OON, Chief Executive Officer, The Nigerian Stock Exchange (NSE); General (Dr.) Yakubu Gowon GCFR (rtd), Chairman, Notore Chemical Industries Plc; Mr. Onajite Paul Okoloko, Group Managing Director/GCEO, Notore Chemical Industries Plc and Mr. Femi Agbaje, Group Chief Finance Officer (GCFO), Notore Chemical Industries Plc during the Facts Behind the Listing of Notore Chemical Industries Plc

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%.

Deal book 300 x 250

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.

 

Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training. He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE). He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy. You can contact him via onome.ohwovoriole@nairametrics.com

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