Asia Pacific Wire & Cable Corporation Limited Reports Second Quarter 2024 Financial Results

Rhea-AI Summary

Asia Pacific Wire & Cable (NASDAQ: APWC) reported its financial results for the six months ended June 30, 2024. Revenues increased by 10.8% to $214.3 million, up from $193.5 million in the same period of 2023. The company saw revenue growth across its Thailand, North Asia, and Rest of World regions. Operating profit improved significantly, reaching $1.2 million compared to a loss of $2.8 million in the previous year. However, net income turned negative at $-0.5 million, down from $0.02 million in 2023. The company's cash position decreased to $33.7 million as of June 30, 2024, compared to $39.0 million a year earlier. APWC reported cash used in operating activities of $10.8 million, primarily due to slower accounts receivable collection.

Positive

• Revenue increased by 10.8% to $214.3 million
• Operating profit improved to $1.2 million from a loss of $2.8 million
• Thailand region's operating profit margin increased from -7.87% to 1.41%
• Cash inflows from financing activities increased to $9.1 million

Negative

• Net income turned negative at $-0.5 million, down from $0.02 million
• Cash and cash equivalents decreased to $33.7 million from $39.0 million
• Cash used in operating activities increased to $10.8 million from $3.5 million
• North Asia region's operating profit margin decreased from 7.08% to -1.52%
• ROW region's operating profit margin decreased from 2.11% to 1.66%

Insights

Financial Analyst

APWC's H1 2024 results show mixed signals. Revenue increased by 10.8% to $214.3 million, driven by growth across all regions. However, the company swung to a net loss of $0.5 million from a small profit last year. The operating profit margin improved from -1.44% to 0.58%, but remains thin.

Key concerns include the deterioration in North Asia's profitability and increased cash used in operations. The $10.8 million cash outflow from operations, up from $3.5 million last year, signals potential working capital issues. The company's liquidity position weakened, with cash decreasing to $33.7 million from $39.0 million year-over-year.

Positively, APWC reduced capital expenditures and increased borrowings, which could provide some financial flexibility. However, the overall financial health appears to have deteriorated, warranting caution from investors.

Market Research Analyst

APWC's regional performance reveals interesting market dynamics. The Thailand region showed significant improvement, driven by infrastructure development and renewable energy projects, particularly in solar power. This aligns with the global trend towards green energy adoption.

The North Asia region benefited from higher copper prices and new customer acquisition. The introduction of rectangular wire production, despite low volumes, suggests a strategic move into higher-value products. However, the region's profitability declined, partly due to increased R&D spending, indicating potential future innovations.

The ROW region, particularly Singapore, saw increased demand for power cables. This could be linked to ongoing smart city initiatives and data center expansions in the region. However, the provision for onerous contracts in Singapore raises concerns about pricing pressures or project execution challenges.

Overall, APWC's diverse regional exposure provides some resilience, but also exposes it to varied market risks and opportunities across the Asia-Pacific region.

TAIPEI, Taiwan, Aug. 26, 2024 (GLOBE NEWSWIRE) -- Asia Pacific Wire & Cable Corporation Limited (NASDAQ: APWC) ("APWC" or the "Company"), a leading manufacturer of wire and cable products for the telecommunications and electric-power industries in the Asia-Pacific region, today announced the Company's financial results for the six months ended June 30, 2024. Unless otherwise indicated, all data are reported in U.S. Dollars at the exchange rate prevailing on the date of the event or result reported.

First Six Months 2024 Financial Results (Ended June 30, 2024), and 2023 comparative results
	First 6 Months 2024		First 6 Months 2023		CHANGE
Revenues	$	214.3 million	$	193.5 million	10.8%
Operating Profit	$	1.2 million	$	-2.8 million	144.7%
Net Income	$	-0.5 million	$	0.02 million	(3500.0)%
EPS1	$	-0.02	$	0.001	(2100.0)%

Revenues for the six months ended June 30, 2024 were $214.3 million, a increase of 10.8% from $193.5 million for the six months ended June 30, 2023.  The increase was attributable to revenue increases across the Company’s Thailand, North Asia and Rest of World ("ROW") regions. Net revenue in the Company’s Thailand region increased by 14.0%, mainly driven by higher sales of power cables and fabrication services, fueled by economic expansion and government efforts in infrastructure development, public utilities, and the implementation of renewable energy, particularly solar power. Revenues in the Company's North Asia region increased by 12.5% for several reasons, including a rise in copper prices, growth in the number of new customers, and the commencement of rectangular wire production. Although the sales volume of rectangular wires was not large, their prices were relatively higher. Revenues in the Company's ROW region increased by 7.5%, the primary driver of this growth was the amplified sales of power cables, spurred by the increased demand in 2024 in Singapore. The Company's North Asia region includes China, Hong Kong and Taiwan; the Thailand region consists of operations and sales within Thailand; the ROW region includes Singapore, Australia and the other markets where APWC has operations or sales outside of the Thailand region and North Asia region.

Operating profit for the six months ended June 30, 2024 was $1.2 million, a increase of 144.7% from operating profit of $-2.8 million for the six months ended June 30, 2023.  Operating profit margin increased from a loss of (1.44)% in 2023 to a profit of 0.58% in 2024.  In the Thailand region, the operating profit margin increased from (7.87)% in 2023 to 1.41% in 2024. This positive shift was largely due to enhanced profitability in the public sector and the reversal of the inventory valuation provision. In the North Asia region, the operating profit margin decreased from 7.08% in 2023 to (1.52)% in 2024, this downturn was primarily due to the reversal of previously provided provisions for employee benefits and pensions in 2023, along with a rise in research and development expenditures in 2024.
The ROW region’s operating profit margin decreased from 2.11% in 2023 to 1.66% in 2024 primarily due to an increased allowance for onerous contracts in Singapore.

Selling, general and administrative expenses for the six months ended June 30, 2024 were $12.5 million, compared to $11.0 million reported for the six months ended June 30, 2023.  Net profit attributable to APWC equity shareholders of the parent was $-0.5 million for the six months ended June 30, 2024, compared to a net profit of $0.02 million for the six months ended June 30, 2023. The weighted average number of shares issued and outstanding was 20.62 million and 20.62 million for the six months ended June 30, 2024 and 2023, respectively.

Financial Condition

APWC reported $33.7 million in cash and cash equivalents as of June 30, 2024, compared to cash and cash equivalents of $39.0 million as of June 30, 2023.

Current assets totaled $282.5 million as of June 30, 2024, compared to $295.0 million as of December 31, 2023.  Working capital was $154.6 million as of June 30, 2024. Short-term bank loans were $53.665 million at June 30, 2024, a decrease of $72,000 from $53.737 million at December 31, 2023.  The Company had $6.2 million in long-term debt outstanding at June 30, 2024, compared to no long-term debt outstanding as of December 31, 2023. Shareholder's equity attributable to APWC was $149.9 million as of June 30, 2024, compared to $157.1 million as of December 31, 2023.

APWC reported cash used in operating activities of $10.8 million during the six months ended June 30, 2024, compared to cash used in operating activities in the amount of $3.5 million in the corresponding period in 2023. The cash outflow from operating activities was primarily due to slower accounts receivable collection. The Company reported $0.8 million in cash outflows from investing activities during the six months ended June 30, 2024, compared to $2.8 million in cash outflows in the same period of 2023. The decrease in cash used in investing activities in the six months of 2024 was primarily attributable to the decrease in purchases of property, plant and equipment in 2024. APWC reported $9.1 million in cash inflows from financing activities during the first six months of 2024, compared to $7.4 million in cash outflows from financing activities in the same period of 2023. The increase in cash inflows was due to an increase in borrowing in 2024.

We encourage shareholders to visit the Company's website for further information (www.apwcc.com). Information on the Company's website or any other website does not constitute a portion of this release.

About Asia Pacific Wire & Cable Corporation Limited

Asia Pacific Wire & Cable Corporation Limited is a holding company incorporated in Bermuda with principal executive offices in Taiwan that operates its business through operating subsidiaries. Through its subsidiaries, the Company is principally engaged in the manufacture and distribution of enameled wire, power cable, and telecommunications products in Thailand, Singapore, Australia, the People’s Republic of China, Hong Kong and certain other markets in the Asia Pacific region. The Company also engages in the distribution of certain wire and cable products manufactured by its controlling shareholder, Pacific Electric Wire & Cable Co., Ltd., and certain third parties. The Company also provides project engineering services in the supply, delivery and installation of power cable. The Company’s major customers include appliance component manufacturers, electrical contracting firms, state owned entities, and wire and cable dealers and factories.

Safe Harbor Statement

This release contains certain “forward-looking statements” relating to the Company, its business, and its subsidiary companies. These forward-looking statements are often identified by the use of forward-looking terminology such as “believes”, “anticipates”, “expects”, “estimates”, “intends”, “plans” or similar expressions. Such forward-looking statements involve known and unknown risks and uncertainties that may cause actual results to be materially different from those described herein as believed, anticipated, expected, estimated, intended or planned. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company’s reports that are filed with the Securities and Exchange Commission and available on its website (www.sec.gov). All forward-looking statements attributable to the Company or to persons acting on its behalf are expressly qualified in their entirety by these factors other than as required under the securities laws. The Company does not assume a duty to update these forward-looking statements.

Contact: Investor Relations Contact: Pacific Holdings Group Attn: Paul Weber 2901 Dallas Parkway, Suite 360 Plano, TX 75093 Phone: (469) 797-7191 Email: pweber@pusa.com

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES CONSOLIDATED INCOME STATEMENTS (Non-Audited) (Amounts in thousands of US Dollars, except share data)
			For the six months
			ended June 30,
			2024				2023
			US$'000				US$'000
Revenue				214,330				193,478
Cost of sales				(200,848	)			(185,501	)
Gross profit				13,482				7,977
Other operating income				981				243
Selling, general and administrative expenses				(12,471	)			(10,990	)
Other operating expenses				—				(9	)
Operating profit				1,241				(2,779	)
Finance costs				(1,165	)			(1,194	)
Finance income				97				87
Share of loss of associates				(1	)			(1	)
Exchange loss				149				(66	)
Other income				243				571
Other expense				(207	)			—
(Loss)/Profit before tax				357				(3,382	)
Income tax expense				(397	)			913
Loss for the period				(40	)			(2,469	)
Attributable to:
Equity holders of the parent				(510	)			15
Non-controlling interests				470				(2,484	)
				(40	)			(2,469	)
Basic and diluted profit per share			$	(0.02	)		$	0.001
Basic and diluted weighted average common shares outstanding				20,616,227				20,616,227

                                                                                      

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Non-Audited) (Amounts in thousands of US Dollars, except share data)
			For the six months
			ended June 30,
			2024			2023
			US$'000			US$'000
(Loss)/Profit for the period			(40	)		(2,469	)
Other comprehensive income/(loss)
Other comprehensive income to be reclassified to profit or loss in subsequent periods:
Exchange differences on translation of foreign operations, net of tax of nil			(10,289	)		(5,827	)
			(10,289	)		(5,827	)
Other comprehensive income not to be reclassified to profit or loss in subsequent periods:
Changes in the fair value of equity instruments measured at FVOCI			253			667
Income tax effect			(51	)		(133	)
			202			534
Re-measuring losses on defined benefit plans			41			69
Income tax effect			(8	)		(14	)
			33			55
Other comprehensive loss for the year , net of tax			(10,054	)		(5,238	)
Total comprehensive loss for the period, net of tax			(10,094	)		(7,707	)
Attributable to:
Equity holders of the parent			(7,113	)		(4,063	)
Non-controlling interests			(2,981	)		(3,644	)
			(10,094	)		(7,707	)

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands of US Dollars)
	As of June 30, 2024 (Non-audited)		As of December 31, 2023 (Audited)
	US$'000		US$'000
Assets
Current assets
Cash and cash equivalents	33,653		37,970
Financial assets at fair value through profit or loss	14		307
Trade receivables	109,552		104,955
Other receivables	1,218		1,670
Contract assets	2,962		13,946
Due from related parties	552		1,368
Inventories	123,218		128,230
Prepayments	5,542		2,595
Other current assets	5,788		3,909
	282,499		294,950
Non-current assets
Financial assets at fair value through other comprehensive income	3,350		2,902
Property, plant and equipment	45,744		49,941
Right of use assets	2,354		2,825
Investment properties	4,862		5,112
Intangible assets	128		124
Investments in associates	753		810
Deferred tax assets	7,502		7,799
Other non-current assets	2,769		2,201
	67,462		71,714
Total assets	349,961		366,664

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands of US Dollars)
	As of June 30, 2024 (Non-audited)			As of December 31, 2023 (Audited)
	US$'000			US$'000
Liabilities
Current liabilities
Interest-bearing loans and borrowings	53,665			53,737
Trade and other payables	50,051			51,743
Due to related parties	4,776			7,941
Financial liabilities at fair value through profit or loss	—			74
Accruals	11,340			15,250
Current tax liabilities	956			2,116
Employee benefit liabilities	1,390			1,839
Financial lease liabilities	482			638
Other current liabilities	5,197			7,235
	127,857			140,573
Non-current liabilities
Interest-bearing loans and borrowings	6,177			—
Employee benefit liabilities	6,146			5,997
Lease liabilities	1,169			1,445
Other non-current liabilities	183			188
	17,577			11,470
Total liabilities	145,434			152,043
Equity
Issued capital	206			206
Additional paid-in capital	118,103			118,103
Treasury shares	(38	)		(38	)
Retained earnings	57,421			57,931
Other components of equity	(25,746	)		(19,143	)
Equity attributable to equity holders of the parent	149,946			157,059
Non-controlling interests	54,581			57,562
Total equity	204,527			214,621
Total liabilities and equity	349,961			366,664

ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Non-Audited) (In thousands of US Dollars)
	For the six months
	ended June 30,
	2024			2023
	US$'000			US$'000
Net cash (used in)/provided by operating activities	(10,768	)		(3,518	)
Net cash used in investing activities	(797	)		(2,849	)
Net cash provided by financing activities	9,092			(7,389	)
Effect of exchange rate	(1,844	)		(1,273	)
Net (decrease)/increase in cash and cash equivalents	(4,317	)		(15,029	)
Cash and cash equivalents at beginning of period	37,970			54,017
Cash and cash equivalents at end of period	33,653			38,988

^{_____________________________________
1} The calculation of the earnings per share is based on 20,616,227 and 20,616,227 basic and diluted weighted average common shares issued and outstanding for the six months ended June 30, 2024 and 2023, respectively. The numerator uses the profit or loss attributable to the ordinary equity holders of the parent.

FAQ

What was APWC's revenue for the first six months of 2024?

APWC reported revenues of $214.3 million for the six months ended June 30, 2024, a 10.8% increase from $193.5 million in the same period of 2023.

How did APWC's operating profit change in the first half of 2024?

APWC's operating profit improved significantly, reaching $1.2 million for the six months ended June 30, 2024, compared to a loss of $2.8 million in the same period of 2023.

What was APWC's net income for the first six months of 2024?

APWC reported a net loss of $0.5 million for the six months ended June 30, 2024, compared to a net profit of $0.02 million in the same period of 2023.

How much cash did APWC have as of June 30, 2024?

APWC reported $33.7 million in cash and cash equivalents as of June 30, 2024, down from $39.0 million as of June 30, 2023.