The shares of Romanian organic fertilizers producer Norofert (NRF) dropped by more than 13% on March 30, reaching a total loss of 34% over the past couple of weeks, Ziarul Financiar reported.

The recent drops were determined by a negative audit report for the company's 2020 financials published on March 23, together with the other materials for the General Shareholders' Meeting (GSM). Norofert's auditor warns about a "significant uncertainty" related to the company's capacity to continue its activity. Among others, the auditor states that "the company has a low level of liquidity in the treasury and bank."  

Vlad Popescu, CEO and founder of Norofert, told local Ziarul Financiar that this is a standard formulation of the audit and that the company's management has already solved some issues signaled by the auditor earlier this year.

"We highlighted note 6 to the financial statements, according to which the company has a low level of liquidity and the [we also highlighted] company's [loose] debt recovery policy. These aspects indicate the existence of uncertainty that could generate doubts regarding the company's capacity to continue its activity without implementing adequate recovery measures," the audit report reads.

The report also highlights that the company's stocks were overvalued by some RON 4.8 mln (EUR 1 mln) at the end of 2020 and that the receivables older than 365 days, worth over RON 4.6 mln, should have been adjusted more given the high uncertainty related to their recovery.

 The company's CEO said that "this contrary opinion that the audit gave does not influence the figures for 2020" and that the difference in stocks has already been adjusted in Q1 / 2021.

Norofert reported a net profit of RON 5.9 mln for 2020, up by 29% compared to the previous year, while its operating revenues doubled to RON 31 mln. For 2021, the company expects a turnover of RON 35 mln and a net profit of RON 8 mln, according to the budget subject to shareholders' approval.

The company's capitalization dropped to RON 137.6 mln (EUR 28 mln) at the end of the March 30 trading session, compared to RON 211 mln (EUR 43.3 mln) on March 15. On March 4, 2020, when Norofert's shares started trading on the Bucharest Stock Exchange's AeRO market, the company had a capitalization of just RON 24 mln.

andrei@romania-insider.com

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