Asia Pacific Wire & Cable Corporation Limited Q2 2024 Results
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Asia Pacific Wire & Cable Corporation Limited Reports Second Quarter 2024 Financial Results
Asia Pacific Wire & Cable Corporation Limited (NASDAQ: APWC) is a leading manufacturer of wire and cable products for the telecommunications and electric power industries in the Asia-Pacific region. The Company recently announced its financial results for the six months ended June 30, 2024. This report outlines key figures and factors contributing to the Company's performance compared to the previous year.
Financial Highlights for First Half of 2024
In the first six months of 2024, revenues increased to $214.3 million, marking an impressive rise of 10.8% from $193.5 million recorded during the same period in 2023. This growth can be attributed to various factors influencing the Company’s operations across its regions, including Thailand, North Asia, and the Rest of World (ROW) regions.
Growth in Key Markets
The Thailand region experienced a substantial revenue increase of 14.0%, primarily due to heightened sales of power cables and fabrication services. This surge is driven by ongoing economic expansion and the government’s initiatives focused on infrastructure development and renewable energy implementation, especially in solar power. In North Asia, revenues increased by 12.5%, attributable to rising copper prices, growth in the new customer base, and the beginning of rectangular wire production. Meanwhile, the ROW region reported a 7.5% increase in revenue, mainly propelled by growing power cable demand in Singapore.
Operating Profit and Net Income
Operating profit for the six months ended June 30, 2024, reached $1.2 million, a significant recovery from a loss of $2.8 million in the same period of 2023, achieving a remarkable 144.7% improvement. The operating profit margin turned positive from a loss of (1.44)% in 2023 to a profit margin of 0.58% for 2024.
Changes in Profit Margins
Specifically, in Thailand, the operating profit margin recovered from (7.87)% in 2023 to 1.41% in 2024, largely due to improved public sector profitability and the reversal of inventory valuation provisions. Conversely, the North Asia region saw a decrease in its operating profit margin from 7.08% in 2023 to (1.52)% in 2024. This decline was influenced by the reversal of past provisions for employee benefits and pensions and increased research and development expenses.
Financial Condition and Assets
As of June 30, 2024, Asia Pacific Wire & Cable Corporation Limited reported cash and cash equivalents amounting to $33.7 million, down from $39.0 million from the prior year. Current assets totaled $282.5 million, a reduction from $295.0 million at the end of 2023, while working capital was reported at $154.6 million as of June 30, 2024.
Debt and Equity Position
The Company’s short-term bank loans stood at $53.665 million, showing a slight decrease from $53.737 million at the end of the previous year. Long-term debt increased to $6.2 million as of June 30, 2024, compared to none at the end of 2023. Furthermore, shareholders' equity attributable to APWC was $149.9 million, down from $157.1 million as of December 31, 2023.
Cash Flow Analysis
During the first half of 2024, APWC experienced a cash outflow of $10.8 million from operating activities, compared to a smaller outflow of $3.5 million in the corresponding period of 2023. This rise in cash outflow was primarily linked to slowed accounts receivable collections. In terms of investing activities, the Company recorded cash outflows of $0.8 million, significantly decreased from $2.8 million during the previous year, attributed to reduced purchases of property and equipment. On the financing side, a substantial cash inflow of $9.1 million was recorded, in contrast to a cash outflow of $7.4 million in the same period of 2023, primarily due to increased borrowing activities.
Conclusion
Asia Pacific Wire & Cable Corporation Limited has shown notable progress during the first half of 2024, with a significant recovery in operating profit and incremental revenue growth across its key regions. The Company remains committed to leveraging growth opportunities amid varying market conditions and aims to enhance its profitability moving forward. Investors and stakeholders are encouraged to stay updated on the Company's performance as it navigates these financial dynamics.
Frequently Asked Questions
1. What were the total revenues reported by APWC for the first half of 2024?
APWC reported total revenues of $214.3 million for the six months ended June 30, 2024.
2. How much did APWC's operating profit improve in the first half of 2024?
The operating profit improved to $1.2 million, a recovery of $3.92 million from the loss of $2.8 million recorded in the first half of 2023.
3. What factors contributed to revenue growth in Thailand?
The revenue growth in Thailand was primarily driven by increased sales in power cables and fabrication services, supported by government infrastructure initiatives and economic expansion.
4. What is the current cash position of APWC?
As of June 30, 2024, APWC reported cash and cash equivalents of $33.7 million.
5. What are the main challenges faced by APWC in 2024?
Main challenges include managing debt levels, improving cash flow from operations, and navigating market price fluctuations, particularly in raw materials like copper.
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