We are pleased to announce an exciting new addition to the CRU Wire & Cable News service called the Financial Profile Viewer (FPV), which allows subscribers to analyse and compare key financial data of 69 publicly listed wire and cable producers and three cable distributors[1].
CRU Wire & Cable News subscribers will receive the new service as part of their subscription. The new service will add further value at no extra cost and is part of continuous improvements to your subscription. If you are not a subscriber of CRU Wire & Cable News, please fill in your details on this page to register your interest. (Select “Market analysis and forecasts (Monitor and Market Outlooks)” and then “Wire and Cable”).
Each updated version of the Financial Profile Viewer (FPV) will have the latest key financial data and an accompanying Global Analysis of cable companies’ operating margin performance.
Please find below an excerpt from the Global Analysis which accompanies each updated version of the Financial Profile Viewer (FPV).
US companies post strongest operating margins
This is our first quarterly Global Financial Performance Dashboard showing 60 of the 74[1] publicly listed cable companies that we cover for CRU Wire & Cable News. Even though the Q3 2022 results for many companies are in, we are showing those for Q2 2022 to allow for a comprehensive comparison of the weighted average operating margins across all regions[2].
Out of the 60 companies shown, there are only nine companies with operating margins above 10.0%: Encore Wire (32.2%), Amphenol (20.7%), OSKH (19.9%), Electro Cable Egypt (15.3%), Gree Wire (14.1%), Corning Inc. (13.6%), Belden (12.3%), Nexans (11.6%) and Finolex (10.3%). Four of these are in the US bringing N. America’s weighted operating margin for Q2 2022 to 14.7% and shows robust demand in N America for various types of cables as outlined in our recent analysis 9M US results, which subscribers can read about in the November issue of CRU Wire & Cable News. One of the companies that stands out is Encore Wire which has seen sales and profitability rise since Q1 2021 on its ability to push cost through to customers in a timely manner despite an inflationary environment. Similarly, Nexans attributed its success to strong demand for electrification products in various sectors, its emphasis on premium added-value products as well as successful cost pass-through and disciplined pricing management in an inflationary environment. Some companies are showing strong operating rates due to the performance of their non-cable business. Such is the case with China’s Gree Wire which we use as a bellwether for China’s aircon and household appliance markets, as it is one of the world’s largest producer of air cons. Most of its winding wire goes into it’s the appliances that it produces. This is a similar case with Amphenol, Corning and OSKH, which are diversified companies where wire and cable revenue can comprise between 5-35% of total revenue.
Higher oil prices and government incentives
Indian, Egyptian and US companies have benefited from government incentives. In India, several different initiatives have raised demand for certain cables. We looked at these in detail in our analysis of recent company results in India. In the US, government funding to boost grid infrastructure, renewables, and broadband in particular has increased demand for fibre and fibre optic cable, benefitting Corning, Belden and CommScope. In the MENA region, as outlined in our regional analysis for H1 2022, companies are benefitting from the increase in oil prices which in turn have raised government revenues and speeded up or restarted infrastructure projects.
Southeast Asian producers suffer low margins
As outlined in our previous analysis of Indonesian companies, FY 2022 promises to be slightly better than last year. However, Q2 2022 operating margins show that Indonesian companies continue to have a difficult time, mainly due to ... (to read the rest of this Insight, please subscribe to CRU Wire & Cable News).
Notes:
[1] - The other 14 companies are not shown here because we only have their annual results, or they are not strictly cable companies (like Graybar, Wesco and Rexel for instance).
[2] – Figure 1 shows the selected company's Net Profit Margins grouped by major region according to HQ location for the quarter in question. Weighted averages are also shown for the region as a whole. This is to say the sum of all companies consolidated sales divided by the sum of all companies net profit within the region.
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