Tunisian Tire Industry Company (STIP) Closes 2024 with a Net Loss of 7.93 Million Dinars
The Tunisian Tire Industry Company (STIP) has closed the 2024 fiscal year with a net loss of 7.93 million dinars, a significant decline compared to the profit of 613,906 dinars recorded in 2023.
Key Financial Highlights
- Net loss: 7.93 million dinars (2024) vs. profit of 613,906 dinars (2023)
- Shareholders' equity: 6.07 million dinars (2024) vs. 14 million dinars (2023)
- Revenue: 140.16 million dinars (2024) vs. 137.37 million dinars (2023), a 2% increase
- Operating result: 2.56 million dinars (2024) vs. 10.2 million dinars (2023), a 75% decline
Factors Contributing to the Net Loss
The net loss is primarily attributed to a significant deterioration in operational performance. The company's activity was halted for nearly two months starting from April 2024, resulting in a 21% decrease in production tonnage compared to the previous year. Additionally, the company's net financial charges increased by 17%, reaching 12.7 million dinars, which largely contributed to the net loss.
Market Dynamics
The slight growth in global revenue masks opposing trends between markets. Sales on the local market increased by 7% to reach 118.1 million dinars, while export revenues declined by 19% to 22 million dinars. Inventory management was a major challenge, with a 46% decrease in the net book value of inventories, from 75.6 million dinars to 40.8 million dinars, reflecting a massive destocking policy.
Ongoing Challenges
The company faces persistent challenges, including a strike from March 13 to April 2, 2025, which disrupted production and sales, with an unknown financial impact on the 2025 accounts. Furthermore, STIP remains subject to a customs adjustment notice of 156.6 million dinars for non-repatriation of export products, although the management considers the financial risk unlikely.
Future Outlook
The significant decline in shareholders' equity, which now stands at 6.07 million dinars, below half of the company's social capital of 12.6 million dinars, legally requires the board of directors to convene an extraordinary general meeting to determine the company's future. Despite the degraded financial result, the company's revenue experienced a slight increase, and the management will need to address the ongoing challenges to restore the company's financial health.
