PRAKAB's profit jump didn't come from the factory floor

More cable out of the door, the same slice kept

Somewhere behind the plaster of a Czech flat, an office block or a factory hall there is a good chance of finding cable from PRAKAB Pražská Kabelovna. The Prague company makes electric cables and wires, the unglamorous copper that carries power through buildings and industry. It is an s.r.o., the Czech limited liability company, and it sits in a group whose ultimate owner is SKB Industrieholding GmbH. The figures below cover the company on its own, under Czech accounting rules, in Czech koruna, for calendar years.

In 2025 PRAKAB took CZK 8.4bn in revenue, up from CZK 7.0bn in 2024. That is growth of 19.1%, or an extra CZK 1.3bn of sales in a single year. For a factory, that is not a rounding error. It means a lot more cable leaving the gates, a lot more expensive metal inside it, or both.

Operating profit, what the business earns from making and selling cable before interest and tax, rose from CZK 225m to CZK 270m, an increase of 20.4%. Revenue and operating profit grew almost in step. The result is the most telling number of the year: the operating margin was 3.2% in 2025 and 3.2% in 2024, a change of 0.0 pp. Out of every hundred koruna a customer paid, PRAKAB kept the same small amount as operating profit as it did the year before.

The bottom line moved differently. Net profit climbed from CZK 133m to CZK 210m, up 57.3%. The net margin widened from 1.9% to 2.5%. So the factory itself did not become more profitable per koruna. Something between the operating line and the final line did the extra work.

Why a cable maker grows big and stays thin

The flat margin makes sense once you look at what a cable is. Most of its cost is metal, mainly copper, plus the plastic around it. Cable makers usually price their products with the metal passed through to the customer: when copper gets dearer, the price of a drum of cable rises with it. Revenue swells, but the factory earns its living on the conversion, the drawing, insulating and testing, not on the metal. In a business like that, a bigger revenue figure with an unchanged margin is exactly what you would expect.

The accounts do not split the growth into volume and price, so it is not clear how much of the extra CZK 1.3bn came from more cable and how much from dearer copper inside the same cable. Order volumes in kilometres or tonnes would settle it. Either way, the margin says the company held its position: it passed on its costs and did not let a busy year eat into its slice.

The cost of the machines tells a supporting story. Depreciation, the annual charge for wearing out equipment, rose from CZK 97.7m to CZK 109m. A rising charge usually means more machinery on the books. Add it back to operating profit and you get EBITDA, a rough measure of the cash the operations throw off: it rose from CZK 322m to CZK 380m, up 17.9%. Its margin barely moved, from 4.6% to 4.5%. The picture is consistent across every operating measure: more business, same economics.

The net profit jump is the part that stands out. Operating profit grew by CZK 45.9m. Net profit grew by CZK 76.4m, a larger amount than the whole operating improvement. The difference has to come from below the operating line: lower interest costs, gains on currencies or financial items, or a lighter tax charge. For a manufacturer that buys metal priced in foreign currencies, exchange rates alone can swing that line from one year to the next. The accounts do not single out which of these did the work; the financial result and the tax charge would tell.

What a thin margin means for the people around the factory

For electricians, builders and utilities buying cable, a margin this thin is reassuring in one way. PRAKAB is not earning fat premiums; the price on the invoice mostly follows the metal. When copper falls, a business built like this has little room to hold prices up.

It also explains why the company lives close to the edge on cash. At the end of 2025 it held CZK 106m, up from CZK 90.4m, a rise of 17.7%. Next to annual sales of CZK 8.4bn, that is a modest buffer. A cable works ties its money up in copper in the warehouse and in invoices waiting to be paid, and more revenue at higher metal prices usually means more money tied up in both. The balance sheet at the end of 2024 totalled CZK 2.1bn, which gives a sense of how much capital the operation carries for its turnover.

The group around PRAKAB is changing too. The company now has a subsidiary, KONEKA s.r.o. What it will add to the business is not yet visible in the numbers, and I would not read anything into it until it shows up in a set of accounts.

For anyone running a business, the useful check is the one PRAKAB's year makes obvious. Put the growth in operating profit next to the growth in net profit. When the bottom line rises much faster, find out which line below operations did it, and ask whether it will happen again next year. Interest savings can last; a lucky exchange rate or a one-off tax item usually does not.

PRAKAB had a good 2025, but not the kind the net profit headline suggests. The factory did what it always does, kept its thin slice of a much bigger pie, and the extra profit arrived from somewhere other than the shop floor. I would watch whether the operating margin holds when copper stops doing the selling.