WorldStage– Cable and wire manufacturing firm Cutix Plc has released its financial forecast for the third quarter of FY2027 ending January 31, 2027, projecting a total revenue of N4.26 billion and a net profit after tax of N80.6 million.
The company expects a 15% increase in top-line revenue during the quarter, driven by strong sales volume performance. However, profitability remains under pressure, with pre-tax profit forecast at N122.1 million—a noticeable drop from the N162 million projected in the second quarter of the fiscal year.
Rising Raw Material and Logistics Costs
Cutix Plc highlighted severe inflationary pressures as the primary factor dampening profit margins. The cost of sales is expected to reach N3.62 billion, representing 85% of total revenue.
According to management assumptions:
Copper Price Inflation: The raw material cost-to-sales ratio is expected to hit 75%. A continuous surge in the price of copper—the firm’s primary raw material—cannot be passed on directly to customers due to stiff market competition.
Elevated Distribution Expenses: Distribution, administration, and operational expenses are budgeted at N426.3 million. Rising fuel pump prices are expected to drive up transportation and delivery overheads compared to previous quarters.
Revenue Breakdown
The majority of the company’s projected N4.26 billion top line will be generated by its core segment, house wiring cables, which accounts for over N3.38 billion; Metal Products: N619.1 million; Power Cables: N256.6 million; Panels & Distribution Boxes: N3.0 million; and other Income (Scrap Sales): N34.5 million
Tax Reform and Interest Rate Outlook
The company’s bottom-line projections factor in a 34% effective income tax rate, reflecting the recent passage of the New Tax Reform Bill by the Senate, resulting in an estimated tax provision of N41.5 million for the quarter.
On finance charges, which are projected at N127.8 million, Cutix anticipates relief from the Central Bank of Nigeria’s monetary policy easing, following the reduction of the Monetary Policy Rate (MPR) from 26.5% to 23.0%.
Cash Flow & Capital Expansion
Despite pressure on operating profits, Cutix maintains a robust cash flow outlook. Net cash generated from operating activities is projected at N4.14 billion, with cash receipts from customers expected to reach 95% of total revenue as 5% is allocated to credit sales. The company also plans to allocate N360.1 million toward capital expenditures—specifically in Property, Plant, and Equipment—to expand production capacity to meet growing demand. Net cash and cash equivalents are expected to close the quarter at N3.77 billion.
