By Charles Onyekamuo in Awka
Cutix Plc, an Nnewi Anambra State cable manufacturing company has posted a profit after tax of N190.5 million or 27.71% of its revenue from N149 million in the preceding year. This is in spite of the harsh political and economic environment that has adversely affected the country’s earnings.
The company’s revenue grew within the year under review from last year by about 20% from N2.358billion to a N2.835billion in 2016, while profit before tax grew from N202 million to N278million.
The company’s Chief Executive Officer, Mr. Ifeanyi Uzodike, who made the disclosure during a press conference to announce the company’s annual general meeting (AGM), fixed for Friday, October 21, at the company’s head office in Nnewi said in view of the performance of the company, the Directors would be recommending that a dividend of 14 kobo per share be paid to the shareholders.
Uzodike said that low economic activities continued during the year under review in spite of the much anticipated increase in the level of foreign investments as a result of the initial warm reception and support extended to the federal government at inception. He said Nigerian economy remains in decline adding that revenue accruable to the government fell significantly as a result of the crash in oil price.
The situation he said became so bad that most manufactures could no longer access up to 10% of their Foreign Exchange (FOREX) requirements through the Central Bank of Nigeria (CBN).
Following this, Uzodike said the company resorted to sourcing for forex to purchase raw materials from the parallel market. The net effect he said was that the cost of doing business increased and inadvertently affected the prices of products significantly.
“We are just working and we thank God. The way we do our business changed. From October last year and till date, we have not received up to $150,000 from the CBN. But we buy from the parallel market. It has generally changed the way we do business.
“We are the first to begin sourcing funds from parallel market for our raw materials,” he said.
The national fall-out or consequence of buying from the parallel market he said means that the prices of goods will adjust, stressing that, what you do as a manufacturer is to try to ensure control of cost.
He however said that the downturn in the economy has not affected the quality of its products and sales, even as he said the recession has provided the firm the opportunity to do business better.
The biggest challenge the company faces he said remains that it cannot source forex from the CBN, adding that the way things are today, the CBN can’t even provide 10% of forex used by manufacturers.
The logical thing he insists is to look for sources of funding elsewhere.
He reasoned that the future of manufacturing industries in the country may be bleak given the difficulties in sourcing forex from either the CBN or parallel market and expressed regrets that some local companies are folding up.