Asia Pacific Wire & Cable (APWC) Stock: Why The Price Jumped Today

By Amit Chowdhry ● Nov 17, 2021
  • The stock price of Asia Pacific Wire & Cable Corporation Ltd (NASDAQ: APWC) increased by over 15% pre-market today. This is why it happened.

The stock price of Asia Pacific Wire & Cable Corporation Ltd (NASDAQ: APWC) increased by over 15% pre-market today. Investors are responding positively to the company’s financial results for the six months ended June 30, 2021

These are the highlights:

— Revenues for the six months ended June 30, 2021, were $225.3 million, an increase of 76.5% from $127.6 million for the six months ended June 30, 2020. The increase was primarily attributable to revenue increases in the company’s Thailand, North Asia, and Rest of World (“ROW”) regions. The net revenue in the company’s Thailand region increased by 58%, primarily attributable to increases in copper prices and due to lower sales in the first half of 2020 because of the pandemic. The revenues in the company’s North Asia region increased by 83.8%, primarily attributable to increases in copper prices and due to lower sales in the first half of 2020 because of the pandemic. The revenues in the company’s Rest of World (ROW) region increased by 102.8%, primarily due to deferral of orders in Singapore (which had a lockdown from March to June 2020) and stricter border control in Australia. And the company’s North Asia region includes China and Hong Kong; the Thailand region consists of operations and sales within 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 operating profit (loss) for the six months ended June 30, 2021, increased to $5 million from $0.3 million for the six months ended June 30, 2020. The operating profit margin increased from 0.2% in 2020 to 2.2% in 2021. In the Thailand region, the operating profit (loss) margin increased slightly year over year from 3.7% to 3.9%. The company revenue increased by 58%, but operating profit remained low because the Thailand region provided a $2.2 million allowance for diminution in the value of inventories in 2021. And in the North Asia region, operating profit (loss) margin decreased slightly from 3% in 2020 to 2.7% for the same period in 2021, primarily attributable to copper price fluctuations. The ROW region’s operating profit (loss) margin increased from (4.1)% in 2020 to 1.3% in 2021, primarily attributable to decreased competition due to COVID-19.

— The selling, general and administrative expenses for the six months ended June 30, 2021, were $13 million, compared to $11.8 million reported for the six months ended June 30, 2020. The net income (loss) attributable to APWC shareholders was $(0.1) million for the first six months of 2021, compared to $(1.2) million for the same period in 2020. The increase in net income was primarily due to an increase in gross profit. The weighted average number of shares issued and outstanding was 13.82 million for the six months ended June 30, 2021, and 2020.

— APWC reported $39 million in cash and cash equivalents as of June 30, 2021, compared to cash and cash equivalents of $52.2 million as of December 31, 2020.

— Current assets totaled $306.6 million as of June 30, 2021, compared to $263.7 million as of December 31, 2020. And working capital was $168.9 million as of June 30, 2021, as compared to $174.3 million as of June 30, 2020. The short-term bank loans were $56.2 million at June 30, 2021, an increase from $10.1 million at the end of 2020. The company had $3.5 million in long-term debt outstanding at June 30, 2021, compared to $3.7 million in long-term debt as of December 31, 2020. Shareholder’s equity attributable to APWC was $152.6 million as of June 30, 2021, compared to $157.9 million as of December 31, 2020.

— APWC reported $46.3 million in cash used in operations during the six months ended June 30, 2021, compared to cash generated from operations of $10.8 million in the corresponding period in 2020. And the increase in cash used in operations in 2021 was primarily attributable to the recovery of the economy, which led to an increase in purchases of materials and copper prices. The Company reported $1.9 million in cash outflows from investing activities during the six months ended June 30, 2021, compared to $15.7 million in cash outflows in the same period of 2020. The decrease in cash used for investing activities was attributable primarily to a decrease in the purchase of investment properties and short-term bank deposits in 2021. APWC had reported $38.7 million in cash inflows from financing activities during the first six months of 2021, compared to $5.6 million in cash inflows from financing activities in the same period of 2020. The increase in cash inflows in 2021 was primarily attributable to an increase in borrowings.

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.