Profits for Cutix decreased in Q1, primarily due to increasing costs for raw materials and escalating financial expenses.
Cutix Plc Reports Q1 2026 Financial Results
Cutix Plc, a leading Nigerian cable manufacturing company, has released its financial results for the first quarter of 2026. The company's performance showed a mixed bag of growth and challenges.
The company's total assets rose significantly by 33.56% year-over-year, reaching N10.677 billion. This growth can be attributed to an increase in inventories and trade receivables, which together account for over 56% of the total assets.
However, the company's operating profit took a hit, falling by 34.71% year-over-year to N276 million. This decline was also reflected in the pre-tax profit, which dropped by 81.04% year-over-year to N86 million. The net profit also followed suit, declining by 81% to N57 million, representing just 6% of the prior year's full profit.
One of the key factors contributing to the decline in profitability was the rise in the cost of raw materials. The cost of raw materials increased by about 7% year-over-year, pushing the cost of sales to N2.898 billion in Q1 2026. This resulted in a compression of the gross margin, which dropped to 18%.
Administrative expenses, on the other hand, decreased by 9.45% year-over-year to N276 million. Finance costs, however, surged 160.30% year-over-year to N191 million. This increase in finance costs represented 43% of last year's full finance costs.
Revenue for the quarter stood at N3.524 billion, a slight decrease of 0.81% year-over-year. The decline in revenue was most noticeable in the company's main income source, cable sales, which decreased by 7.40% to N3.282 billion.
Despite the challenges, Cutix Plc declared a final dividend of 10 kobo per share for the 2025 financial year, scheduled to be paid on September 2, 2025. The company's total borrowings surged 175% to N5.004 billion, now representing 47% of total assets.
It's worth noting that, according to the search results, no credit institutions announced 8% interest rates for senior CDs in the first quarter of 2026.
In conclusion, while Cutix Plc faced challenges in the first quarter of 2026, the company remains resilient and is continuing to deliver dividends to its shareholders. The company's focus now will be on navigating the rising costs and finding ways to increase revenue to improve its profitability.
