Cutix PLC reports 13% increase in pre-tax profit as cable and wire revenue climbs

Cutix PLC reported a pre-tax profit of N764 million for the period from May 1 to October 31, 2024, up from N673.4 million reported the previous year.

This reflects a 13.46% increase, with the company’s post-tax profit also climbing by 13.72%, reaching N514.1 million.

During the reported period, revenue surged to N7.8 billion, up from N5 billion in 2023, driven by a robust increase in cable and wire sales.

Additionally, total assets grew by 11.7% year-over-year, reflecting steady progress in the company’s financial position.

Key highlights �

• Revenue: N7.8 billion, +54.37% YoY
• Cost of sales: N6.4 billion, +74.30% YoY
• Gross profit: N1.3 billion, +0.39% YoY
• Operating profit: N605.8 million, -21.21% YoY
• Finance cost: N151.1 million, -2.85% YoY
• Other income: N309.2 million, 415.52% YoY
• Pre-tax profit: N764 million, 13.46% YoY
• Post-tax profit: N514.1 million, 13.72% YoY
• Earnings per share: N7.30, -43.2% YoY
• Total Assets: N7.5 billion, 11.7% YoY

Commentary�

A cursory look at Cutix’s financial results shows that ‘other income’ played a key role in the reported pre-tax profit, as high costs of sales dampened the full impact of income from the company’s main revenue sources.

• The company reported a 54.37% year-over-year increase in revenue for the period ending October 31, 2024, with cable and wire sales accounting for 77.7% of total revenue at N6 billion, followed by armored cable sales at 22.3% or N1.7 billion.
• However, Cutix experienced a 74.30% rise in the cost of sales, totaling N6.4 billion, with raw material costs constituting 86.8% of this amount, reducing gross profit to N1.3 billion.
• Operating profits declined by 21.21%, amid a 2.85% drop in finance costs, which stood at N151.1 million, primarily due to accrued interest from term loans, commercial papers, and overdrafts.
• On a positive note, the company saw a remarkable 415.52% year-over-year increase in ‘other income’, particularly from the sale of scrap.
• Consequently, despite rising costs of sales, the company achieved a pre-tax profit of N764 million, buoyed by strong performance from scrap sales.
• Pre-tax profit grew by 13.72%, while earnings per share fell to N7.30, down from N12.84.

• Assets and liabilities position:�

  Between October 31, 2023, and October 31, 2024, Cutix PLC’s total assets increased from N6.76 billion to N7.55 billion, driven by growth in inventories and a slight rise in non-current assets.

  • Finished goods accounted for 50% of inventories, totaling N2.1 billion, while raw materials made up 28.5%, amounting to N1.1 billion.
  • Among non-current assets, property, plant, and equipment were the largest component, with plant, machinery, and equipment comprising over 50% of this category.

  The company reduced its long-term borrowings, leading to a decrease in non-current liabilities, while current liabilities increased due to higher short-term borrowings and trade payables.

  • Commercial papers made up 49.1% of short-term borrowings, totaling N744.7 million.
  • Accruals, totaling N520 million, represented a significant portion of trade payables, which amounted to N1.1 billion.
  • Okoye Izuchukwu is a financial market writer and trader with extensive expertise in both Nigerian and international markets. With a keen eye for market trends and a passion for insightful analysis, he translates complex financial concepts into engaging content. By combining practical trading experience with thorough research, Okoye offers valuable perspectives that empower readers to make informed decisions in the ever-evolving world of finance.