Muskita Q1 profits decline

Muskita Alumnium Industries (MAI) reported a disappointing set of first quarter results, which saw net profits tumble by 19.4% to CYP 1.01 mln from CYP 1.25 mln in the same period a year ago.

Earnings per share fell to 1.23 cent from 1.52 cent a year earlier.

Total turnover increased by 5.3% to CYP 7.15 mln in the first quarter from CYP 6.78 mln a year ago and CYP 27.6 mln for the whole of 2004, mostly on the back of higher exports.

Gross profit margins tumbled sharply in the first quarter to 32.46% of sales at CYP 2.32 mln from 37.91% in Q104 and 36.29% margin for the whole of 2004.

In another negative development, costs surged sharply higher and more than sales growth. Total expenses surged by 7.85% year-on-year to CYP 1.083 mln from CYP 1.00 mln in the same period a year ago, while finance costs also increased to CYP 110.357 from CYP 29.088.

Pretax profits fell to CYP 1.16 mln from CYP 1.52 mln in Q104 while net profits attributable to shareholders fell 19.4% to CYP 1.011.075 in the first quarter of 2005 from CYP 1.255.025 in the same period a year ago and CYP 4.934.597 for the whole of 2004.

The company blamed the decline in profits on higher depreciation associated with the operation of the new factory amounting to CYP 197.000, as well as higher raw material costs and operational expenses. Referring to the increase in finance costs, Muskita explained that of the CYP 110.357 charge, some CYP 81.000 refer to exchange differences and interest payable.

Following the release of the results, the Management of Muskita said it is confident that overall, year-end profitability will be “satisfactory” subject to no adverse development occurring.