Asia Pacific Wire & Cable Corporation Limited Reports Third Quarter 2023 Financial Results
- None.
- Decrease in revenues by 5.3%
- Operating profit fell by 97.1%
- Increase in short-term bank loans by 25.3%
- Decrease in shareholder's equity
Insights
An examination of Asia Pacific Wire & Cable Corporation Limited's (APWC) financial results reveals several key points of interest from a financial analysis perspective. The reported 5.3% decrease in revenues year-over-year suggests a contraction in the company's sales, which is particularly pronounced in the Thailand and North Asia regions. This contraction could be indicative of broader economic challenges, such as the global economic slowdown and the Sino-American trade war, which have affected demand for APWC's products.
The sharp decline in operating profit by 97.1% is alarming, as it signals a significant reduction in the company's profitability. The operating profit margin's contraction from 1.23% to 0.04% is a critical indicator of reduced operational efficiency or increased costs that could not be offset by revenue. The fluctuation of copper prices, which is a major raw material for wire and cable products, might have contributed to this decline. The increase in net income, however, suggests that there may have been non-operating factors at play, such as cost reductions in areas outside of operations or favorable tax conditions.
From a liquidity standpoint, the decrease in cash and cash equivalents from $54.0 million to $38.5 million, along with the reported cash used in operating activities, raises questions about the company's cash flow management and its ability to sustain operations without external financing. The increase in short-term bank loans by 25.3% also indicates a reliance on debt to maintain liquidity, which could be a concern for long-term financial stability.
APWC's performance in different geographical regions provides insight into the company's market dynamics. The revenue decrease in Thailand and North Asia is a reflection of the external economic factors impacting these markets. The slowdown in government infrastructure spending in Thailand and the ongoing trade tensions between the U.S. and China are likely to continue affecting sales in these regions. Conversely, the revenue increase in the Rest of World (ROW) region, particularly due to the construction sector in Australia and public sector projects in Singapore, shows that diversification in different markets can help mitigate regional downturns.
The competitive landscape of the wire and cable manufacturing industry is also worth noting. APWC's results must be compared with industry peers to assess whether the revenue decline and profit margin contraction are company-specific issues or part of a wider industry trend. Furthermore, the company's ability to adapt to changing market conditions, such as the shift towards renewable energy and the demand for more advanced telecommunications infrastructure, will be crucial for future growth.
The financial results of APWC can be contextualized within the broader economic environment. The global economic slowdown has likely contributed to the decrease in government spending on infrastructure, which directly impacts companies like APWC that rely on such projects for a significant portion of their revenue. Additionally, the Sino-American trade war has created uncertainty and may have led to reduced investment in infrastructure, negatively affecting demand for APWC's products in North Asia.
It is also important to consider the impact of currency fluctuations on APWC's financials, as the company reports in U.S. Dollars. Any significant changes in exchange rates could distort the true financial performance when converting from local currencies. Moreover, the increased reliance on short-term bank loans to finance operations could be indicative of broader credit market conditions, where companies may be taking advantage of low interest rates to fund their activities. However, this strategy could pose risks if interest rates rise or if there is a tightening of credit conditions.
TAIPEI, Taiwan, Jan. 02, 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 nine months ended September 30, 2023. 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 Nine Months 2023 Financial Results (Ended September 30, 2023), and 2022 comparative results | |||||
| First 9 Months 2023 | First 9 Months 2022 | CHANGE | |||
| Revenues | $ | 294.2 million | $ | 310.7 million | (5.3)% |
| Operating Profit | $ | 0.1 million | $ | 3.8 million | (97.1)% |
| Net Income | $ | 1.1 million | $ | 0.6 million | |
| EPS1 | $ | 0.05 | $ | 0.03 | |
Revenues for the nine months ended September 30, 2023 were
Operating profit for the nine months ended September 30, 2023 was
Selling, general and administrative expenses for the nine months ended September 30, 2023 were
Financial Condition
APWC reported
Current assets totaled
APWC reported cash used in operating activities of
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 nine months | |||||||||
| ended September 30, | |||||||||
| 2023 | 2022 | ||||||||
| US$'000 | US$'000 | ||||||||
| Revenue | 294,210 | 310,734 | |||||||
| Cost of sales | (276,619 | ) | (289,267 | ) | |||||
| Gross profit | 17,591 | 21,467 | |||||||
| Other operating income | 390 | 944 | |||||||
| Selling, general and administrative expenses | (17,854 | ) | (18,589 | ) | |||||
| Other operating expenses | (17 | ) | (4 | ) | |||||
| Operating profit | 110 | 3,818 | |||||||
| Finance costs | (1,814 | ) | (1,124 | ) | |||||
| Finance income | 137 | 82 | |||||||
| Share of loss of associates | (1 | ) | (1 | ) | |||||
| Exchange loss | (852 | ) | (1,309 | ) | |||||
| Other income | 976 | 1,691 | |||||||
| Other expense | — | (3 | ) | ||||||
| (Loss)/Profit before tax | (1,444 | ) | 3,154 | ||||||
| Income tax expense | 640 | (1,700 | ) | ||||||
| (Loss)/Profit for the period | (804 | ) | 1,454 | ||||||
| Attributable to: | |||||||||
| Equity holders of the parent | 1,116 | 576 | |||||||
| Non-controlling interests | (1,920 | ) | 878 | ||||||
| (804 | ) | 1,454 | |||||||
| Basic and diluted profit per share | $ | 0.05 | $ | 0.03 | |||||
| Basic and diluted weighted average common shares outstanding | 20,616,227 | 19,819,561 | |||||||
| 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 nine months | |||||||
| ended September 30, | |||||||
| 2023 | 2022 | ||||||
| US$'000 | US$'000 | ||||||
| (Loss)/Profit for the period | (804 | ) | 1,454 | ||||
| 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 | (11,141 | ) | (22,393 | ) | |||
| (11,141 | ) | (22,393 | ) | ||||
| 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 | 446 | (1,499 | ) | ||||
| Income tax effect | (89 | ) | 300 | ||||
| 357 | (1,199 | ) | |||||
| Re-measuring losses on defined benefit plans | 152 | 378 | |||||
| Income tax effect | (30 | ) | (75 | ) | |||
| 122 | 303 | ||||||
| Other comprehensive loss for the year , net of tax | (10,662 | ) | (23,289 | ) | |||
| Total comprehensive loss for the period, net of tax | (11,466 | ) | (21,835 | ) | |||
| Attributable to: | |||||||
| Equity holders of the parent | (6,542 | ) | (15,522 | ) | |||
| Non-controlling interests | (4,924 | ) | (6,313 | ) | |||
| (11,466 | ) | (21,835 | ) | ||||
| ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES | |||
| CONSOLIDATED BALANCE SHEETS | |||
| (In thousands of US Dollars) | |||
| As of September 30, 2023 (Non-audited) | As of December 31, 2022 (Audited) | ||
| US$'000 | US$'000 | ||
| Assets | |||
| Current assets | |||
| Cash and cash equivalents | 38,523 | 54,017 | |
| Financial assets at fair value through profit or loss | 775 | 39 | |
| Trade receivables | 76,590 | 81,982 | |
| Other receivables | 2,759 | 2,397 | |
| Contract assets | 4,187 | 12,450 | |
| Due from related parties | 7,893 | 11,018 | |
| Inventories | 133,021 | 130,608 | |
| Prepayments | 6,268 | 3,341 | |
| Other current assets | 5,109 | 3,673 | |
| 275,125 | 299,525 | ||
| Non-current assets | |||
| Financial assets at fair value through other comprehensive income | 2,186 | 1,553 | |
| Property, plant and equipment | 46,038 | 50,713 | |
| Right of use assets | 2,872 | 3,432 | |
| Investment properties | 4,811 | 5,250 | |
| Intangible assets | 131 | 139 | |
| Investments in associates | 755 | 805 | |
| Deferred tax assets | 7,689 | 7,143 | |
| Other non-current assets | 3,039 | 2,459 | |
| 67,521 | 71,494 | ||
| Total assets | 342,646 | 371,019 | |
| ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES | |||||
| CONSOLIDATED BALANCE SHEETS | |||||
| (In thousands of US Dollars) | |||||
| As of September 30, 2023 (Non-audited) | As of December 31, 2022 (Audited) | ||||
| US$'000 | US$'000 | ||||
| Liabilities | |||||
| Current liabilities | |||||
| Interest-bearing loans and borrowings | 57,115 | 45,576 | |||
| Trade and other payables | 41,399 | 39,891 | |||
| Due to related parties | 10,603 | 16,613 | |||
| Financial liabilities at fair value through profit or loss | 19 | 6 | |||
| Accruals | 8,427 | 21,218 | |||
| Current tax liabilities | 978 | 2,432 | |||
| Employee benefit liabilities | 2,189 | 1,947 | |||
| Financial lease liabilities | 608 | 627 | |||
| Other current liabilities | 5,939 | 5,289 | |||
| 127,277 | 133,599 | ||||
| Non-current liabilities | |||||
| Interest-bearing loans and borrowings | 2,849 | 12,155 | |||
| Employee benefit liabilities | 7,310 | 7,693 | |||
| Lease liabilities | 1,498 | 1,947 | |||
| Deferred tax liabilities | 4,036 | 4,197 | |||
| 15,693 | 25,992 | ||||
| Total liabilities | 142,970 | 159,591 | |||
| Equity | |||||
| Issued capital | 206 | 206 | |||
| Additional paid-in capital | 118,103 | 118,103 | |||
| Treasury shares | (38 | ) | (38 | ) | |
| Retained earnings | 55,180 | 54,064 | |||
| Other components of equity | (28,398 | ) | (20,740 | ) | |
| Equity attributable to equity holders of the parent | 145,053 | 151,595 | |||
| Non-controlling interests | 54,623 | 59,833 | |||
| Total equity | 199,676 | 211,428 | |||
| Total liabilities and equity | 342,646 | 371,019 | |||
| ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES | |||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||
| (Non-Audited) | |||||
| (In thousands of US Dollars) | |||||
| For the nine months | |||||
| ended September 30, | |||||
| 2023 | 2022 | ||||
| US$'000 | US$'000 | ||||
| Net cash (used in)/provided by operating activities | (13,982 | ) | 5,701 | ||
| Net cash used in investing activities | (3,575 | ) | (1,477 | ) | |
| Net cash provided by financing activities | 5,097 | 6,512 | |||
| Effect of exchange rate | (3,034 | ) | (5,726 | ) | |
| Net (decrease)/increase in cash and cash equivalents | (15,494 | ) | 5,010 | ||
| Cash and cash equivalents at beginning of period | 54,017 | 42,512 | |||
| Cash and cash equivalents at end of period | 38,523 | 47,522 | |||
_____________________________
1 The calculation of the earnings per share is based on 20,616,227 and 19,819,561 basic and diluted weighted average common shares issued and outstanding for the nine months ended September 30, 2023 and 2022, respectively.
FAQ
What are Asia Pacific Wire & Cable Corporation Limited's (APWC) financial results for the nine months ended September 30, 2023?
What caused the decrease in revenues for APWC?
What is the financial condition of APWC as of September 30, 2023?
What was the impact of the decrease in sales on APWC's cash flow from operating activities?
