21st October 2017
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Company Data
 
East African Cables Ltd.
http://www.eacables.com
Par Value:                  0.50/-
Closing Price:           5.50
Total Shares Issued:          253125000.00
Market Capitalization:        1,392,187,500
EPS:             -1.8
PE:                 -3.056
 

Leading Kenyan cable manufacturer.

H1 Turnover 1.470026b vs. 2.102282b -30.075%
H1 [Loss]/ profit from operating activities [221.046m] vs. 7.699m -2,971.100%
H1 Interest expense [97.223m] vs. [87.768m] +10.773%
H1 Foreign exchange [losses]/ gains [13.357m] vs. 33.871m -139.435%
H1 [Loss]/ profit before tax [331.806m] vs. [46.198m] -618.226%
H1 [Loss]/ profit for the period [232.447m] vs. [31.465m] -638.748%
H1 [Loss]/ profit from operations attributable to equity holders of parent company [191.223m] vs. 2.951m -6,579.939%
Basic and diluted EPS [0.76] vs. 0.01 -7,700.000%
Total assets 7.290308b vs. 8.011425b -9.001%
Total equity 2.319471b vs. 3.102100b -25.229%
Cash and cash equivalents at 30th June 65.886m vs. [26.487m] +348.748%
No interim dividend

Company Commentary

The resignation of the CEO Peter Arina has been accepted
EA Cables contracted business grew 11% buoyed by regional electrification projects and the Groups strategic focus to utilise installed capacity in our aluminium plant.
however, the non contracted business segment experienced a 30% drop in revenues hampered greatly by continued constraint in accessing working capital lines.
The Company continues to pursue innovative financing structures in line with a comprehensive capital restructure program tat is underway to address the working capital gaps

Conclusions

very soft First Half.

EA Cables FY Earnings through Dec 2016 versus Dec 2015
FY Turnover 3.650451b vs. 3.724212b -1.981%
FY Cost of sales [2.846146b] vs. [3.110205b] -8.490%
FY Gross profit 804.305m vs. 614.007m +30.993%
FY Expenses [823.383m] vs. [752.569m] +9.410%
FY Loss before impairment losses and depreciation [11.619m] vs. [90.042m] -87.096%
FY Loss from operating activities [531.488m] vs. [649.783m] -18.205%
FY Loss before income tax [810.349m] vs. [1.087004b] -25.451%
FY Loss for the year [582.602m] vs. [741.204m] -21.398%
Basic and diluted EPS [1.80] vs. [2.21] -18.552%
Total Assets 7.548406b vs. 8.384143b -9.968%
Total Equity 2.556409b vs. 3.149987b -18.844%
Cash and cash equivalents at 31st December 45.186m vs. [88.820m] +150.874%
No dividend

Company Commentary

Group Revenue declined by 2% attributed to decrease in London Metal Exchange Prices.
Group recorded a 31% increase in gross profit levels owing to production efficiencies
Group's net earrings improved by 21% from a loss of 741m to a loss of 583m
Order Book of 4.2b
the Group continues to seek improved credit facilities

Conclusions

This Turnaround has taken 2 Years now and still has not turned around

East African Cables Limited H1 2016 results through 30th June 2016 vs. 30th June 2015

H1 Turnover 2.102282b vs. 2.044239b +2.839%
H1 Profit from operating activities 7.699m vs. 48.560m -84.145%
H1 Interest expense [87.768m] vs. [30.386m] -188.844%
H1 Foreign exchange gains/ [Losses] 33.871m vs. [115.739m] +129.265%
H1 [Loss] profit before tax [46.198m] vs. [97.566m] -52.649%
H1 [Loss] profit for the period [31.465m] vs. [70.934m] -55.642%
H1 [Loss] profit from operations attributable to equity holders if parent company 2.951m vs. [26.762m] +111.027%
EPS 0.01 vs. [0.11] +109.091%
Total assets 8.011425b vs. 7.441167b +7.664%
Cash and cash equivalents at 30th June [26.487m] vs. [41.543m] -36.242%

Company Commentary

Revenue and Net Earnings from our Kenya Operations grew by 18% and 42% respectively
increased demand from local utilities for last Mile Connectivity projects
Cash generated from operations improved by 431m
No Interim Dividend
a healthy current order book

Conclusions

Improving Trajectory and metrics.

East African Cables Limited FY 2015 through 31st December 2015 vs. 31st December 2014
FY Revenue 3.724212b vs. 5.098417b -26.954%
FY Cost of sales [3.110205b] vs. [3.778927b] -17.696%
FY Gross profit 0.614007b vs. 1.319490b -53.466%
FY Administrative expenses [401.778m] vs. [262.783m] +52.893%
FY Impairment of receivables [329.007m] vs.
FY Results from operating activities [649.783m] vs. 577.157m
FY Exchange losses [312.194m] vs. [39.262m] +695.156%
FY Net finance costs [437.221m] vs. [69.674m] +527.525%
FY [Loss] profit before income tax [1.087004b] vs. 0.507483b -314.195%
FY [Loss] profit for the year [741.204m] vs. 341.149m -317.267%
EPS [2.21] vs. 1.16 -290.517%
Cash and cash equivalents at 31st Dec [88.820m] vs. [292.826m] -69.668%

Company Commentary

The Overall decline in performance was attributable to

Interruptions in our production processes as we concluded process flow re alignment in our refurbished Kitui road plant.
Foreign Exchange Losses due to sharp depreciation of regional currencies against the USD.
Decline in London Metal Exchange prices by 20% within the year.
Low demand in our exports markets due to political environment prevailing within the region.
Impairment of receivables. Though collection efforts are in place to recover those debts, the group found it prudent to carry a provision on these receivables.

The group opened the year with a strong order book

Conclusions

Soft Earnings.

H1 Earnings through 30th June 2014 vs. 30th June 2015
H1 Turnover 2.044239b vs. 2.607223b -21.6%
H1 Profit from Operating Activities 48.560m vs. 326.989m -85.1%
H1 Net Finance Costs [146.126m] vs. [0.479m]
H1 Profit Before Income Tax [97.566m] vs. 326.510m -129.9%
H1 Profit After Tax [70.934m] vs. 231.822m -130.6%
H1 EPS [0.11] vs. 0.82 -113.4%
H1 Cash and cash equivalent at 30th June [41.543m] versus 139.950m

Company Commentary accompanying the release of the H1 Earnings

The overall decline in performance was attributable to significant interruptions in our production processes as we conclude the last phase of our capacity upgrades
Despite the Interruptions Kenya remained profitable but group recorded a loss owing to our Tanzania operation which was heavily impacted by FX Losses

Conclusions

Self explanatory but Buyers are now looking through FY 2015 in to 2016.

East African Cables has issued a Full Year profits Warnings see here
http://www.rich.co.ke/media/docs/EA%20Cables%20-%20Half%20Year%20Results.pdf

Projected Profit for the Group for the year ending 31st December 2015 may be more than 25% lower compared to the earnings of the year ended 31st Dec 2014
reason for reduced earnings has been due to significant interruptions in our production output at our Kitui road Factory
refurbishment to be completed in September 2015 and thereafter the capacity of the Factory will be significantly increased
In addition a sharp depreciation of regional currencies against the Dollar particularly in Tanzania where the Shilling depreciated by over 34% leading to FX Losses

Full Year Earnings through 31st December 2014 versus through 31st December 2013
Full Year Turnover 5.098417b versus 4.502964b +13.22%
Full Year profit before operating activities 577.157m versus 595.944m
FY Net Finance Costs [69.674m] versus [10.544m] +560%
FY Profit Before Tax 507.483m versus 585.400m -13.31%
Full Year Profit After Tax 341.149m versus 398.202 -14.327%
Foreign currency translation differences on foreign Operations [37.372m] versus [3.568m]
Full Year Earnings Per share 1.16 versus 1.37 -15.32%
Final Dividend of 50cents a share [+50cents Interim]

Company Commentary

Despite a decline in London Metal Exchange prices of 12% our group revenue grew by 13% attributable to increased volumes driven by new markets. Earnings decline was due to reduced margins in our new markets

Conclusions

Interesting Dividend Policy where they are paying out 86.206% of their EPS out as Dividend.
Clearly chased Turnover growth at the expense of some margin erosion.

Ist Half Earnings through 30th June 2014 versus through 30th June 2013
H1 Turnover 2.607223b versus 2.232734b
H1 Profit before Tax 326.510m versus 320.811m
H1 Profit After Tax 231.822m versus 228.077m
H1 Earnings Per Share 0.82 versus 0.81 +12.345%
Cash and Cash equivalent at 30th June 139.950m versus [155.511m]

Company Commentary

East African Cables said on Wednesday its pretax profit inched up by 2 percent to 326.5 million shillings ($3.72 million) on the back of higher sales.
Revenue at the cable-maker jumped 17 percent due to higher volumes in new markets, the company said, without providing details of those markets.
The company said it expects to complete the modernisation of its factory in the Kenyan capital, at a cost of 600 million shillings, in November this year.
The factory upgrade will result in additional capacity and enable East African Cables to produce new products, the company said.

Conclusions

inexpensive and the earnings trajectory probably steepens from here

FY Earnings through December 2013 versus through December 2012
FY Turnover 4.502964b versus 4.300608b +4.705%
Profit from Operating Activities 595.944m versus 775.383m -23.141%
FY Profit before Tax 585.400m versus 753.243m -22.28%
FY Profit after Tax 398.202m versus 522.060m -23.72%
FY EPS 1.37 versus 1.74 -21.26%
Final Dividend 60cents a share [+40cents Interim] 1shilling Total Pay Out.

Company commentary

The Growth of 5% in revenue primarily driven by export sales.
low demand in the local market
2014 Outlook The Group is focused on regional diversification and product development to expand its revenue base and return more earnings to its shareholders

Conclusions

At the First Half Stage PBT was running at -18.33 and we have closed the Full Year at -22.28%. Interesting that the local market was weak. Given the Spike in the extractives, I think Cables has a bright medium term Future.
Final Dividend is worth 3.785% of yield.
H1 6 months ended June 30th 2013 versus 6 months through June 2012
H1 Turnover 2.232734b versus 2.253527b
Profit from Operating Activities 323.715m versus 412.385m
H1 PBT 320.811m versus 392.816m -18.33%
H1 PAT 228.077m versus 274.033m -16.77%
H1 EPS 0.81 versus 0.98 -17.346%
Cash generated from operating Activities [256.315m] versus 269.202m

Company Commentary

Revenues remained stable despite decline in world metal prices due to growth in sales volumes.
Net Earnings declined due to a change in business mix.

Conclusions

They are citing Metals Prices for Crimping H1 Turnover.
Its a cheap share and trades on a single digit PE.


FY Earnings through December 2012 versus FY Earnings through 2011
Turnover 4.300608b versus 4.971665b -13.497%
Net Finance Costs [22.14m] versus [112.145m] -80.2577%
FY PBT 753.243m versus 464.756m +62.072%
FY PAT 522.060m versus 314.730m +65.8755%
FY EPS 1.74 versus 1.15. +51.3043%
Revaluation of Property of Equipment 494.164m versus 0.00
Final dividend of 0.60 shillings per share [in addition to an interim dividend of 0.40 shillings] versus 0.80 in 2011

Company Commentary

The growth in earnings was driven by increased export sales, production efficiency, cost reduction, more stability in the regional currencies and improved profit from our subsidiary in Tanzania, the company said on Monday.

Conclusions

Strong Results.
Finance Costs considerably reduced.
Turnover down -13.497% however.

Swot Analysis H1 Through 30th June 2012 versus through 30th June 2011
Turnover 2.253527b versus 2.351386b
Profit Before Tax 392.816m versus 249.333m
Earnings Per Share 0.98 versus 0.69

The electric cables maker said exports to neighbouring states would continue to be a key driver of earnings.

Conclusions

Strong Results. Looks attractive on a Forward PE Basis.

Swot Analysis FY 2011 versus FY 2010
Turnover 4.972655b versus 3.604366b +38%
Profit Before Tax 464.756m versus 258.645m +80%
Profit After Tax 314.73m versus 183.85m
EPS 1.15 versus 0.89
Final Dividend 0.50
Interim Dividend 0.30

Swot Analysis 12 months to Dec 2010 versus 12 months to Dec 2009

Turnover 3.604366b versus 2.811861b
Impairment losses [203.066m] versus [99.64m]
PAT 183.85m versus 296.033m
Revaluation of Property 750.875m versus 470.394m
EPS 1.12 versus 1.52
Dividend 1 Shilling
1 for 4 Held Bonus

Company Commentary cites One Time Loss and Restructuring of Tanzania Subsidiary

Conclusions

The Company did warn. Increased Volumes signal that the underlying
Metrics are constructive.
Average Price Over the last 5 Weeks
Average Price Over the last 5 Months
No. Of Shares Traded Over the last 5 Weeks
No. Of Shares Traded Over the last 5 Months
Market Capitalization Over the last 5 Weeks
Market Capitalization Over the last 5 Months
Data Source: Nairobi Stock Exchange
Trading Day: 19 Oct 2017
 
Downloads
 
  29-AUG-2017 ::  HALF YEAR RESULTS
  Unaudited Group Results for the Six Months Ended 30th June 2017.

Download N.S.E Announcement
   
  27-JUN-2017 ::  AGM Resolutions
  Resolutions Passed at East African Cables Limited 52nd Annual General Meeting.

Download N.S.E Announcement
   
  02-JUN-2017 ::  AGM Notice
  Notice of Annual General Meeting.

Download N.S.E Announcement
   
  02-MAY-2017 ::  Full Year Results
  Audited Group Financial Results for the Year Ended 31st December 2016.

Download N.S.E Announcement
   
  02-APR-2017 ::  Notice of AGM & 2013 Group results
  Notice of AGM & 2013 Group results

Download N.S.E Announcement
   
 
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