Muskita Aluminium Industries (MAI) reported a 14.4% reduction in net profits during the first half of the year on the back of higher depreciation charge and as a result of the increase in the value of the dollar and fuel costs.
MAI’s turnover increased by 4.5% to CYP 14.5 mln from CYP 13.87 mln mostly because of local sales (+6.1% to CYP 9.1 mln) on the back of the strong local real estate sector. The contribution of local revenues to total sales remain at high levels and stands at 62.6% compared to 61.6% in 1H04. European export sales reached CYP 5.4 mln compared to CYP 5.3 mln a year ago.
Muskita’s gross profit declined to CYP 4.7 mln from CYP 5.3 mln with the gross profit margin declining to 32.7% of sales from 38.25% a year ago. Gross profit margin from local operations decreased significantly from 43.3% to 35.1% in 1H05 mainly due to the higher depreciation charges associated with the new plant in Limassol. Margins from European sales also deteriorated from 30.2% to 28.8% in 1H05 due to higher competition from European rivals. According to management, declining margins were primarily attributed to the Company’s expanded capacity base in Cyprus, the year-on-year increase in the average cost
of primary aluminium from USD 1,663 per ton to USD 1,844 per ton in 1H05, as well as the higher energy costs and labour production costs, according to an investment report by Egnatia Financial Services.
EBITDA fell by 4.7% YoY to CYP 3.5 mln with margins deteriorating from 26.5% to 24.2% in 1H05 (vs 23.0% in 1Q05). Total Operating Expenses
were contained by 2.9% YoY to CYP 2.07 mln due to lower unit production costs stemming from productivity gains and despite the rise in energy and payroll expenses.
Net financing expenses surged from CYP 33k to CYP 160k in 1H05 due to higher interest paid on loan facilities and higher FX losses (CYP 113k vs CYP 48k in 1H04).
MAI’s net profit in the first half fell by 14.4% YoY to CYP 2.2 mln from CYP 3.2 mln a year ago in the same period yielding an EPS of 2.71 cent vs. 3.17 cent in 1H04. The P/E ratio based on the stock’s last closing
price of CYP 0.64 and the annualised EPS stands at 11.8x.
The book value per share according to Financial Mirror calculations was 36.5 cent per share for a price to book value of 1.81x. In the financial statements, total factory and machinery equipment investment was steady at CYP 18.7 mln, stock of goods was marginally higher at CYP 6.3 mln from CYP 5.84 mln, debtors were up at CYP 8.13 mln from CYP 7.19 mln while cash at bank was up at CYP 1.85 mln from CYP 1.74 mln at the end of last year.
