Muskita profits decline

Muskita Aluminium Industries (MAI) reported a 11% decline in net profits to CYP 3.2 mln in the first nine months of the year following higher depreciation charges, increased energy costs and foreign exchange losses on conversion of balances.

The Board issued a negative profit warning for the whole of 2005 and said its profits for this year will be lower than last years’ CYP 4.93 mln profit.

EPS stood at 3.89 cent against 4.38 cent a year ago.

Total sales improved by 3.9% year-on-year to CYP 21.03 mln from CYP 20.25 mln a year ago, with the bulk of the increase due to higher local sales, which were up 7.2% to CYP 13.25 mln while export sales in the EU were flat at CYP 7.7 mln compared to CYP 7.8 mln a year ago.

Muskita’s gross profit declined by 7.4% to CYP 6.86 mln, with the gross profit margin to sales declining to 32.6% from 36.5%.

According to management, declining margins were primarily attributed to the Company’s expanded capacity base in Cyprus, the increase in the average cost of primary aluminium as well as the higher energy costs and labour production costs.

Total operating expenses fell 1.2% to CYP 3.05 mln due to productivity gains and despite the rise in energy and payroll expenses as the cost containment effort proved successful.

Net financing costs surged to CYP 188k from net income of CYP 35k a year ago due to higher interest paid on loan facilities and higher FX losses. Pretax profit amounted to CYP 3.65 mln from CYP 4.38 mln a year ago while net after tax profit attributed to shareholders fell 11.1% y/y to CYP 3.210.836 in the first nine months of 2005 compared to CYP 3.610.575 a year ago in the same period.

Book value according to Financial Mirror calculations improved to 37.6 cent per share for a price to book value of 1.57x. Cash flow from operations remained strong, helping the repayment of loans, which fell to CYP 320k from CYP 1.23 mln end of last year and a reduction in creditor balances to CYP 3.2 mln from CYP 6.2 mln end of 2004.