Cutix Plc, a Nigerian cable manufacturing company listed on the Nigerian Exchange, has reported a sharp decline in profit for the first quarter of its 2025 financial year. The company’s profit dropped by 81 per cent, falling to ₦56.9 million compared with ₦306.7 million recorded in the same period of 2024. The results, which were released in its unaudited financial statement for the period ending July 31, 2025, show that the company is under pressure from high operating and finance costs despite recording growth in its assets.
Revenue for the quarter remained largely flat, standing at ₦3.52 billion, compared with ₦3.55 billion in the first quarter of 2024. This suggests that the company’s sales growth has been stagnant, with little improvement in turnover, even though costs of operation and borrowing have increased significantly.
Cutix said its total assets grew strongly during the period, rising 34 per cent to ₦10.68 billion, up from ₦7.99 billion in the same period last year. However, this expansion came with a sharp increase in liabilities, which jumped 73 per cent to ₦6.44 billion from ₦3.73 billion in 2024. Net assets remained steady at ₦4.23 billion, showing that the company was able to keep its equity position stable despite the surge in debt obligations.
One of the highlights of the quarter was the company’s heavy capital investment. Capital expenditure rose by a massive 1,173 per cent, moving from ₦15.2 million in Q1 2024 to ₦193.8 million in Q1 2025. This spending was directed at new plant, equipment, and technology as the firm seeks to expand capacity and modernise operations. The company also reported that its paid-up share capital doubled to ₦3.52 billion during the quarter.
The financial statement showed that profit before tax dropped to ₦86.2 million, compared with ₦454.7 million in Q1 2024. Income tax expenses also went down significantly, falling 80 per cent to ₦29.3 million, in line with the weaker profit numbers. Earnings per share (EPS) fell sharply to 0.81 kobo, compared with 8.71 kobo recorded in the same quarter of 2024, which reflects the impact of lower profitability on shareholders’ returns.
Operating profit was also lower at ₦275.9 million, compared with ₦422.6 million in the first quarter of the previous year. The cost of sales rose to ₦2.90 billion, up from ₦2.75 billion, showing the impact of inflation and rising production costs on the business. At the same time, finance costs more than doubled, reaching ₦190.8 million compared with ₦89 million in Q1 2024, and this put additional pressure on the company’s earnings.
Cutix’s total equity remained stable at ₦4.23 billion, but the number of shares in issue increased to 7.05 million units. The company’s share price also declined during the quarter, closing at ₦3.90 per share (390 kobo), which represents a 24 per cent drop from ₦5.13 per share (513 kobo) in the same period last year.
The decline in profitability comes at a time when many Nigerian manufacturing companies are struggling with rising costs of production, high interest rates, and unstable energy supply. Analysts believe that Cutix’s decision to increase capital expenditure shows the company is preparing for long-term growth, even though short-term profits are under strain. However, the firm will need to manage its rising debt and interest expenses carefully to avoid further erosion of profits in the coming quarters.
For investors, the drop in share price and earnings per share reflects weaker returns, but the stability in equity and strong asset growth may signal resilience if the company can translate its investments into future revenue growth.
As the financial year progresses, shareholders and market watchers will be keen to see whether the company’s heavy spending on new equipment and technology will improve productivity and help recover lost profitability.
