Asia Pacific Wire & Cable Corporation Ltd. Reports First Quarter 2018 Financial Results

Carlsbad, California, UNITED STATES


TAIPEI, Taiwan, June 25, 2018 (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 three months ended March 31, 2018. Unless otherwise indicated, all data are reported in US Dollars at the exchange rate prevailing on the date of the event or result reported.

 
First Three Months 2018 Financial Results (Ended March 31, 2018)
 
 First 3 Months 2018First 3 Months 2017CHANGE
Revenues$106.1 million$87.9 million20.7%
Gross Profit$7.9 million$7.2 million11.0%
Net Income$0.09 million$4.8 million(98.2)%
EPS(1)$0.01$0.35(97.1)%
 
(1)The calculation of the earnings per share is based on 13,819,669 and 13,819,669 basic and diluted weighted common shares issued and outstanding for the three months ended March 31, 2018 and 2017, respectively.
 

First Three Months 2018 Results 

Gross revenues for the three months ended March 31, 2018, were $106.1 million, an increase of 20.7% from $87.9 million in the prior year. The increase was primarily attributable to a 19.9% revenue increase in the Thailand region. Net revenue increased by 7.78% in local Thaliand currency and by 19.9% in US Dollars, the former primarily due to the rise in the copper price and the growth in aluminum products deliveries in Q1 2018 and the latter because of the appreciation in the Thai Baht by 10% compared to 2017. Revenues in the Company's North Asia region increased by 29.9%, primarily due to an increase in the copper price in 2018 and because the operation of Shanghai Yayang Electric’s (SYE) were temporarily suspended to meet environmental regulatory requirements in 2017.

Revenues in the Company's Rest of World ("ROW") region increased by 14.8%. Revenue of Australia Pacific Electric Cable Pty. Ltd. increased by 49.9% in local currency due to an increase in sales, but the revenue growth was offset by a 5% decrease in revenue of Sigma Cable Company (Private) Limited ("SCC") in local Singapore currency due to market competition. Appreciation of the Singapore and Australia local currencies was another reason for the revenue growth in US Dollars, against which the Singapore dollar appreciated by 6.87% and the Australian dollar by 3.5% compared to 2017.  The Company's North Asia region includes China and Hong Kong; the Thailand region contains the operations and sales inside 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.

The gross profit for the three months ended March 31, 2018 increased by 11.0% to $7.9 million from $7.2 million in the same period last year. Gross margin was down by 8.0%, decreasing from 8.1% in 2017 to 7.5% this year.  In the Thailand region, gross margin dropped primarily because of the increase in aluminum prices and decrease in high-margin orders.  In the North Asia region, gross margin increased primarily due to the gain on sales of scrap in 2018. Moreover, some of SYE's equipment and machinery were shut down temporarily for enhancements to meet environmental regulations, which increased costs in 2017. In the Rest of World regions, gross margins decreased in 2018, primarily attributable to high competition. In addition, the increase in copper price eroded the margin of SCC since more than 60% of its sales were signed for mid- and long-term projects with fixed sales.

Selling, general and administrative expenses for the first quarter of 2018 were $6.4 million, compared to $5.9 million reported in the first quarter of 2017.  Operating income was $1.8 million for the quarter, compared to operating income of $6.1 million in the first quarter of 2017.

Net income attributable to APWC shareholders was $0.09 million for the first quarter of 2018, compared to net income of $4.8 million in the same period in 2017.  The decrease in net income was due to a decrease in other operating income in 2018, since the gain on sale of the land use rights and buildings of Ningbo Pacific Cable Co., Ltd. was recognized in 2017, as well as a decrease in the exchange rate gain (the Ningbo facility is hereinafter referred to as "NPC"). The weighted average number of shares issued and outstanding was 13.82 million for the three months ended March 31, 2018 and 2017.

Financial Condition

APWC reported $54.0 million in cash and cash equivalents as of March 31, 2018, compared to cash and cash equivalents of $46.1 million as of December 31, 2017.

Current assets totaled $290.4 million as of March 31, 2018, compared to $283.0 million as of December 31, 2017.  Working capital was $189.8 million as of March 31, 2018.  Short term bank loans were $35.0 million at March 31, 2018, a decrease from $41.2 million at the end of 2017.  The Company had no long-term debt outstanding at March 31, 2018.  Shareholder's equity attributable to APWC was $158.3 million as of March 31, 2018, compared to $153.3 million as of December 31, 2017.

APWC reported $14.3 million cash generated from operations during the three months ended March 31, 2018, compared to cash outflows from operations of $9.2 million in the corresponding period in 2017. The cash generated in 2018 was mainly caused by a decrease of trade receivable and increase of trade payable. The Company reported $1.0 million in cash outflows from investing activities during the three months ended March 31, 2018, compared to $7.6 million cash generated in the same period of 2017. The cash generated in 2017 was attributable, in part, to the disposal of land use rights and buildings of NPC.  APWC reported $8.0 million in cash outflow from financing activities during the first quarter of 2018, compared to $8.0 million generated in the same period of 2017. The cash used in 2018 was mainly attributable to the increase in the repayment of bank loans.

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

Asia Pacific Wire & Cable Corporation is principally engaged in the manufacture and distribution of telecommunications (copper and fiber optic) and power cable and enameled wire products in the Asia Pacific region, primarily in Thailand, China, Singapore and Australia. The Company manufactures and distributes its own wire and cable products and also distributes wire and cable products ("Distributed Products") manufactured by its principal shareholder, Pacific Electric Wire & Cable Company, a Taiwanese company ("PEWC"). The Company also provides project engineering services in the supply, delivery and installation ("SDI") of power cables to certain of its customers.

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" 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 anticipated, believed, estimated or expected. 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 periodic 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:
Asia Alpha Investor Relations
Lisa A. Gray

Partner & Senior Account Manager
Phone: +1-212-989-9899
Email:
lisa@asiaalphair.com
Web:  https://asiaalphair.com/


 
ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES
 CONSOLIDATED INCOME STATEMENTS
(Unaudited)
(Amounts in thousands of US Dollars, except share data)
 For the three month period
 ended March 31, 
  2018    2017  
Sales of goods / services$106,076  $87,909 
Cost of sales (98,141)  (80,759)
Gross profit 7,935   7,150 
    
Other operating income 421   4,923 
Selling, general and administrative expenses (6,449)  (5,940)
Other operating expenses (141)  (17)
Operating income 1,766   6,116 
    
Finance costs (333)  (257)
Finance income 89   115 
Exchange gain 345   1,208 
Other income 134   0 
Other expense (1)  (555)
Profit before tax 2,000   6,627 
    
Income (expense)/tax benefit (906)  (900)
    
Profit for the year$1,094  $5,727 
    
Attributable to:   
Equity holders of the parent 86   4,800 
Non-controlling interests 1,008   927 
Basic and diluted earnings per share$0.01  $0.35 
Basic and diluted weighted average common shares outstanding 13,819,669   13,819,669 
        


 
ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(Amounts in thousands of US Dollars, except share data)
 For the three month period
 ended March 31, 
  2018    2017  
Profit for the year$1,094  $5,727 
Other comprehensive income   
Other comprehensive income to be reclassified to profit or loss in subsequent periods:   
  Exchange differences on translation of foreign operations, net of tax of $0 7,454   7,171 
    
  Exchange difference or liquidation of a subsidiary reclassified to profit or loss 248   0 
  Net gains on  available-for-sale financial assets 212   91 
  Income tax effect (42)  (18)
  170   73 
    
Other comprehensive income not to be reclassified to profit or loss in subsequent periods:   
  Re-measuring losses on defined benefit plans (84)  (44)
  Income tax effect 17   9 
  Defined benefit pension plan, net of tax (67)  (35)
    
Other comprehensive profit for the period, net of tax 7,557   7,209 
    
Total comprehensive profit for the period, net of tax 8,651   12,936 
Attributable to:   
Equity holders of the parent 4,616   9,732 
Non-controlling interests 4,035   3,204 
 $8,651  $12,936 
        


 
ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands of US Dollars, except share data)
 
 As of March 31, 2018
(Un-Audited)
 As of December 31, 2017
(Audited)
    
ASSETS   
Current assets:   
Cash and cash equivalents$54,006           $46,093
Other current financial assets – at fair value through profit or loss 27  0
Trade receivables 104,405  112,403
Other receivables 9,947  9,509
Contract assets - current 302  0
Due from related parties 10,675  13,354
Inventories 104,856  97,205
Gross amounts due from customers for contract work-in-progress 0  162
Prepayments 1,588  1,244
Other current assets 4,643  3,057
  290,449  283,027
Non-current assets   
Other non-current financial assets-held to maturity 0  2,747
Other non-current financial assets at fair value through other comprehensive income 3,084  0
Property, plant and equipment 43,613  42,326
Prepaid land lease payments 1,102  1,067
Investment properties 786  763
Intangible assets 139  138
Investments in associates 900  861
Other non-current assets 991  892
Deferred tax assets 3,392  3,022
  54,007  51,816
Total assets$344,456 $334,843
      


 
ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands of US Dollars, except share data)
 
 As of March 31, 2018
(Un-Audited)
 As of December 31, 2017
(Audited)
    
Current liabilities:             
Interest-bearing loans and borrowings$34,973  $41,151 
Trade and other payables 36,556   28,850 
Contract liabilities - current 110   0 
Due to related parties 3,602   5,805 
Due to immediate holding company 1,537   1,537 
Other current financial liabilities at fair value through profit or loss 41   139 
Accruals 15,336   15,246 
Current tax liabilities 5,082   4,536 
Employee benefit liability 302   877 
Financial lease liabilities 33   36 
Provisions for employee benefit 450   456 
Onerous contracts provisions 431   555 
Dividend payable 548   524 
Other current liabilities 1,676   1,563 
  100,677   101,275 
    
Non-current liabilities   
Employee benefit liability 8,533   7,416 
Financial lease liabilities 34   42 
Provisions for employee benefit 126   130 
Deferred tax liabilities 3,235   3,154 
  11,928   10,742 
Total liabilities 112,605   112,017 
    
Equity   
 Issued capital 138   138 
 Additional paid-in capital 110,376   110,376 
 Treasury shares (38)  (38)
 Retained earnings 53,280   53,350 
 Other components of equity (5,501)  (10,498)
Equity attributable to equity holders of the parent 158,255   153,328 
Non-controlling interests 73,596   69,498 
Total equity 231,851   222,826 
Total liabilities and equity$344,456  $334,843 
        



 
ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands of U.S. Dollars)
 For the three month period
 ended March 31, 
  2018   2017 
Net cash (used in)/provided by operating activities$14,349  ($9,221)
Net cash provided by/(used in) investing activities (974)  7,593 
Net cash provided by/(used in) financing activities (7,925)  7,984 
Effect of exchange rate changes on cash and cash  equivalents 2,463   2,259 
Net decrease in cash and cash equivalents 7,913   8,615 
Cash and cash equivalents at beginning of period 46,093   48,231 
Cash and cash equivalents at end of period$54,006  $56,846