Hawk Eye wrote:The principal raw materials used in the production of wires and cables are copper and aluminum as conductive materials and plastic and rubber for insulation. All the raw materials are at its lowest, therefore input cost of Cable companies are low and margins are high.Copper decreased to 2.42 USD/LB on Wednesday September 16 from 2.43 USD/LB in the previous trading day. Copper averaged 3.11 from 2010 until 2015, reaching an all time high of 4.58 in February of 2011 and a record low of 2.24 in August of 2015
Aluminum decreased to 1613.50 USD/Tonne on Tuesday September 15 from 1621 USD/Tonne in the previous trading day. Aluminum averaged 1804.70 from 1989 until 2015, reaching an all time high of 3271.25 in July of 2008 and a record low of 1022.70 in November of 1993.http://www.tradingeconomics.com/commodity/copper
Rubber increased to 556 MYR/Kg on Monday September 14 from 553 MYR/Kg in the previous trading day. Rubber averaged 506 from 1990 until 2015, reaching an all time high of 1743 in February of 2011 and a record low of 194.50 in December of 2001.ACL cablesRevenue2009/10---: 7,242 Mn2010/11---: 9,569 Mn2011/12---: 10,306 Mn2012/13---: 11,326 Mn2013/14---: 11,446 Mn2014/15---: 14,427 MnSales grown by 26% during the year 2014/15.… During the second half of 2014/15, there was a surge in sales in the Dealer market and in the Institutional market including the Ceylon Electricity Board which is our most important Customer. This was mainly due to the increase in infrastructure development activities of the Government as well as those of the Private sector… Annual Report 2014/15- MDs Review
Gross Profit2009/10---: 16%2010/11---: 13%2011/12---: 17%2012/13---: 16%2013/14---: 17%2014/15---: 18%2015/16 Q1- 22%
As highlighted above, most of the raw material related to cable production was high during 2011. It is clearly reflected in ACL cables performance as well by reporting a low GP margin % for 2011. As these metal prices started falling the GP margins also started improving for ACL where From 2012/13 onwards it has gradually improved 1% every year
For the 1st Quarter of 2015/16 they have recorded a Revenue of 3,353Mn and GP margin of 290Mn. GP margin is 22%. This is where the value of the company going to be levered for this year
EPS 2014/15 - 14.55
Annualized – 17.64
Again the trend I note in the revenue and profit pattern are, they report a low revenue and profit for June Qtrs and keeps improving for the balance 3 Qtrs. Accordingly June 2015/16 Quarter has been a good start for them With a Revenue of 3.35Bn , GP margin 22% and EPS 4.41. They can end well even if they continue the same performance as Qtr 1.But I believe they will deliver much more
Cash Balance2009/10---: 99 Mn2010/11---: (284) Mn2011/12---: 137 Mn2012/13---: 402 Mn2013/14---: 314 Mn2014/15---: 631 Mn2015/16 Q1 : 801 MnVery healthy cash position. This will reduce their finance cost in coming Qtrs, and giving room for more expansions
Net Assets/Share2009/10---: 69.852010/11---: 70.452011/12---: 87.542012/13---: 95.482013/14---: 101.842014/15---: 123.392015/16 Q1 : 127.82
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