Muskita lifts sales, but profits dip

Muskita Aluminium Industries Pcl managed to lift overall sales during 2005, but net profits declined due to higher depreciation, finance and energy costs.

Total turnover increased by 5.89% to CYP 29.22 mln from CYP 27.62 mln in 2004, mainly on the back of higher export sales to European countries as well as higher local sales.

Muskita’s pretax profit fell by 14.8% to CYP 5.04 mln with the margin deteriorating from 21.4% in 2004 to 17.2%. According to management, the decline was primarily attributed to the Company’s expanded capacity base in Cyprus, which caused depreciation charges to increase by CYP 598k, the hike in energy costs and the 23.7% increase in primary aluminium prices and the increase of CYP 350k in net finance charges that included exchange differences.

Net profit fell 8.8% y/y to CYP 4.500.172 in 2005 from CYP 4.934.597 in 2004 with EPS down at 5.45 cent from 5.98 cent previously. Based on the latest closing price of 64 cent on the CSE, the stock is trading on a historic 2005 p/e of 11.7 times.