NGX sanctions Notore Chemical Industries as company battles to stay afloat

Onajite Okoloko, Founder, Notore Chemical Industries

The Nigerian Exchange Limited (NGX) has sanctioned Notore Chemical Industries and 12 other companies for failing to file their financial statements after the regulatory due date, Daily Global Newspaper reports.

According to the Exchange’s X-compliance report obtained by Daily Global Newspaper, Notore and other companies were sanctioned during the current financial year 2022 for failing to meet the regulatory requirements covering third quarter (Q3) of 2021, full year (FY) of 2021 and Q1 2022.

The sanction comes amid questions and panic by Notore’s investors on its ability to continue as a going concern.”

Owned by Delta billionaire, Mr. Onajite Okoloko, Notore is a fertiliser and agro-allied company in Nigeria. The group’s current business comprises fertiliser production, supply and trading of fertiliser, and power.

The X-Compliance Report is a transparency initiative of NGX Regulation Limited (NGX RegCo), which is designed to maintain market integrity and protect investors by providing compliance-related information on all listed companies.

By its listing regulation, companies listed on the NGX are expected to file yearly and quarterly financial reports, 30 days after the end of each quarter. Usually, companies that fall short of this rule are tagged MRF (Missed Regulatory Filing) and the omission often attracts financial sanction.

… Notore Battles To Stay Afloat

A close look at the books of Notore Chemical Industries in the last few years obtained by THE WITNESS from the NGX indicate that the company is indeed troubled and distressed.

This is because the Notore’s investors are still licking their wounds over the abysmal performance the company recorded in year 2021 as it posted N3.27 billion post-tax loss during the period. The agro-allied company also posted N2.88 billion loss in September 2020.

The firm’s financial statement for the 15 months period ended December 2021 (as it failed to publish its fourth quarter result in 2020) showed that though it grew revenue by 36.74% to N25.71 billion at the end of last financial year, it was wiped off by the N28.98 billion it spent to generate this income, which was 33.66% higher than the N21.68 billion it expended in September 2020.

Consequently, it had N3.27 billion loss in 2021 against the N2.88 billion it suffered in the previous year.

Meanwhile, the Port Harcourt-based company saw its operating income dipping by 19.47% to N9.96 billion, following 17.10% rise in administrative expenses to N6.94 billion and other income declining by 8.29% to N17.13 billion at the end of 2021. Its finance income dropped significantly by 63.87% to N388,000.00, though it spent 12.89% more than N23.41 billion finance cost it recorded in 2020.

Loss per share stood at N5.94 in 2021 compared to N3.97 it had in the previous year.

The firm struggled with a liquidity squeeze last year as its current total assets of N18.96 billion were way lower than its N101.15 billion current liabilities, meaning that it had a hard time settling its debts during this period.

This challenge also persisted in the first six months of 2022r, as the company’s current liabilities still dwarfed its current assets. While total current assets were N19.55 billion in the half year 2022, total liabilities stood at N70.53 billion during this period.

However, Notore seems to be beginning to find its feet, as it posted N2.61 billion post-tax profit in H1 2022 instead of the N15.85 billion loss it declared in the corresponding period last year.

It had an astronomical leap in revenue, which grew by 178.61% to N26.29 billion from N9.43 billion in H1 2020, buoyed by income from urea and other chemicals which rose by 311.07% to N24.97 billion from N6.07 billion in H1 2020.

Notore operating income in 2022 also improved to N10.85 billion from N3.03 billion loss it recorded in the prior period, underpinned by administrative expenses and selling and distribution expenses which went down by 21.54% to N3.44 billion and 34.01% to N111.58 million respectively in H1 2022.

However, despite the little improvements in H1 2022, financial analysts are still worried if the company could sustain the trend by the end of the financial year.