Things seem to go in the right direction for Asia Pacific Wire after a decent performance in the first nine months of 2020.
Asia Pacific Wire & Cable Corp. (APWC) is a leading manufacturer of cable and wire products. The company hasn’t been in news lately, but the stock price touched its 52-week high on Jan. 12 trading session.
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Though, the company posted third-quarter results in the first week of 2021, showing promising outcomes. Overall, the stock has performed well since Sep. 2020, following the procurement of a loan from its shareholders.
What has been happening?
Asia Pacific Wire & Cable is well-positioned in the Asia-Pacific region and is leading the electric-power industry. Recently, the company announced the nine months results by the end of the third quarter period.
The company reported its revenue for the nine-months was almost $249.7 million, a drop of 17% from the prior year. The decrease in revenues over three quarters was impacted by the COVID-19 pandemic. The company faced issues in generating revenues from Thailand, North Asia, and other parts of the world.
Since the operations have once again started to get normal, things are going to get even better for the company. During the nine months, the company increased its operating profit to $5.9 million from a loss of $3.1 million in 2019. This was a great achievement for the company considering the hostile economic conditions. While the operating margin rose to 2.9% from a loss of 1.2%.
Moreover, the company tried to minimize its expenses. During the nine months, the Selling, general and administrative expenses were reported around $18.2 million, down from $19 million in 2019.
Back in Sep. 2020, Asia Pacific Wire & Cable announced that it has obtained a $6 million loan from its majority shareholder, Pacific Electric Wire & Cable Co., Ltd. This news made a massive positive impact on the stock price and the investors were attracted towards it. Since then, the stock has shown promising movements.
The loan carries a one-year term with a 3% interest rate. The loan is secured by a pledge of the firm’s 98.3% ownership stake Sigma Cable Company Pvt. Ltd. The company plans to use the proceeds from the loan to fund capital expenditures and working capital requirements of other projects.
Asia Pacific Wire & Cable is working on various projects which include the execution of $200 million in supply, delivery, and installation (SDI) projects in Singapore and a couple of other projects in China and Australia. APWC can fund its subsidiaries who will be taking over the projects.
Asia Pacific Wire & Cable Corp. is engaged in work across Thailand, China, Singapore, and Australia. The company’s third-quarter results show that it has performed significantly well in the nine months of 2020. This shows that the 2021 prospect looks bright. Moreover, the stock performance has improved by the later end of 2020. Things seem to be going in favor of APWC stock and the long-term prospect is also bullish. Let’s see how the company recovers in 2021 and emerge as a strong firm.