Pakistan Cable Limited (PCL), the country’s leading cable and wire manufacturer, has conducted its 3QFY23 analyst briefing to discuss its financial results and future outlook. The company reported a 28% decline in profit to PKR 521mn (EPS: PKR 12.73) in 9MFY23, mainly due to elevated finance cost.
The company also shared its progress on its Nooriabad factory, which is operational but not fully functional yet. The company expects to start medium voltage and copper rod plant operations in the new factory in the next two months. The complete shift from SITE factory to Nooriabad factory will take 12-18 months.
The company is in talks regarding the sale of its SITE area factory, which has a current market value of ~PKR 5.5bn. The company’s long term borrowing stands at PKR 4.8bn, out of which ~PKR 1.7bn is concessional loan (TERF). The company is confident that it does not need to go for debt restructuring as its balance sheet is strong.
The company anticipates a stable demand in cable and wire market, but hopes to increase its market share as major expansions are coming online. The company’s estimated market share is 25%. The company also sees a growing demand for solar segment, which accounts for 25%-30% of its project sales. The company has recently supplied copper conductors to NTDC, and aims to capture a larger share of this market.
The company expects to improve its gross margins by 200-250bps after the full commencement of Nooriabad factory, due to operational efficiency and low wastage. The company posted 15.4% gross margins in 3QFY23, up by 140bps SPLY.
The company also commented on the international prices of copper and aluminum, which have not come down as compared to other commodities. The company expects a hike in prices of these commodities in the long term.