Cutix Records 81% Drop in Q1 Profit as Rising Costs Squeeze Margins
Cutix Plc, a frontline Nigerian cable manufacturer, has reported a sharp decline in its earnings for the first quarter ended July 31, 2025, as rising input costs and higher finance charges undermined profitability.
The company’s unaudited financial results show that profit before tax fell to ₦84 million, a significant 81 percent drop from the ₦448 million posted in the corresponding quarter of 2024.
The slump reflects both weaker sales performance and persistent cost pressures in the operating environment.
Revenue from cable sales, which constitute the bulk of Cutix’s income, dipped by 7.4 percent to ₦3.28 billion in Q1 2025 from ₦3.55 billion in Q1 2024.
This decline was accompanied by a rise in production expenses, largely driven by surging global prices of raw materials such as copper and polymers, which are critical to cable manufacturing.
Industry analysts point out that Nigeria’s volatile exchange rate and inflationary trend have further worsened the cost of importing inputs, leaving manufacturers like Cutix with little room to protect margins.
Consequently, the company’s gross profit weakened substantially during the quarter.
Adding to the pressure, finance costs increased, reflecting the high-interest-rate environment and heavier borrowing obligations.
The rise in debt-servicing expenses further weighed down the company’s earnings and underlined the challenges of operating under Nigeria’s tight monetary conditions.
Despite the subdued performance, Cutix’s board has reassured stakeholders of its resilience, noting that it is intensifying efforts to strengthen working capital, enhance receivables collection, and reduce cost inefficiencies.
At its recent board meeting, the directors approved the Q1 financial statements and confirmed that the results will be filed with the Nigerian Exchange Group before the end of August.
Market watchers say the company’s performance underscores the broader difficulties facing Nigerian manufacturers, many of whom are contending with high production costs, foreign exchange volatility, and rising interest expenses.
They caution that unless macroeconomic conditions improve, dividend sustainability and shareholder returns in the sector could come under pressure.
Cutix had earlier in the year rewarded shareholders with a dividend for its 2025 financial year. However, the weaker Q1 showing raises concerns that payouts may be reviewed if earnings do not recover in subsequent quarters.
The company is expected to provide more clarity on its operational adjustments and cost-management strategies when it releases its full unaudited results to the market in the coming days.
