East African Cables bounces back
|CREDIT| East African Cables|
East African Cables (CABL) posted a profit of Ksh634 million for the six months through June or the first half of 2019. That marked a sharp turnaround for the company that made a loss of Ksh303 million in the first half of 2018. The company made a loss of Ksh232 million in the first half of 2017. Revenue for the first half came at Ksh698 million, down from Ksh872 million in a similar period last year.
CABL’s profit jumped despite the drop in revenue because the company did a great job controlling its costs. CABL has been working on a turnaround plan that has involved debt restructuring and operational efficiency. The company said its turnaround efforts have yielded a 15% reduction in total expenses and also helped reduce its manufacturing waste. Moreover, the turnaround efforts resulted in the company’s borrowing costs more than halving to Ksh109 million in the first half of 2019 from Ksh279 million in the first half of 2018. Better costs control allowed CABL to bounce back to profit in the latest period.
CABL plans to use its cost-savings to invest in expanding its product distribution network in order to boost sales. The company sales cables used in a variety of areas from electricity distribution to home wiring to internet connection. CABL is looking to capitalize on President Uhuru Kenyatta’s big 4 agenda that include boosting manufacturing and construction. In addition to Kenya, CABL operates in five other East African countries.
Trans-Century (TCL) is the largest shareholder in CABL, owning a stake of more than 68% in the company. CABL’s shares rose 9.96% on Friday to end the week at Ksh3.09. Trans-Century shares jumped 10% on Friday to close at Ksh3.30.