While the observations seem to be based on facts,it is clear that based on the history of companies that have reported declining sales and profits,EA Cables share price will have to come down. If in the next one or two quarters,the trend changes,then who knows. For now,it is better to keep away or sell this share.

wat dividends r they offering this time?

Some interesting info I picked up on the EAC website. This counter might be better than I have surmised in the past... READ ON.

East African Cables is set to further enhance its continental market reach with an ambitious expansion plan in the next three years. This will see the company establishing a solid market presence in more than 12 African countries up from its current five countries market footprint by the year 2012.


Alongside market expansion,the firm is gearing up for the commissioning of a new copper cables production line and major upgrade later in the year within its recently commissioned Kshs 1billion integrated manufacturing facility in Nairobi’s Industrial area. The commissioning of the new copper production line is expected to boost East African Cables production capacity by more than sixty percent.

Currently operating in the five East Africa countries of Kenya,Uganda,Tanzania, Rwanda,and Burundi,East African Cables has grown its export portfolio which accounted for 57% of its turnover in 2008 compared to 31% the previous year. On the downside Mr. Mwangi cited fluctuations in aluminum business to the local utility- KPLC this accounted for about 10% of the group turnover down from 28% the previous year. This on a positive note serves to eliminate concentration risk. I HAVE ALWAYS THOUGHT THAT THE COMPANY SURVIVES ON THE GOODWILL OF KPLC,BUT CLEARLY NOT!




Opportunity calls but few respond.

In Q1 2008,cables had lots of business from Tanesco which exceeded cables tz's capacity. Obviously those orders were not there in 2009. Cables has been expanding away from KPLC business to lower the concentration risk. At some point in 2004 it was nearly 50%,however that has declined to about 10% and could decline further. But remember cables enjoys synergies with other TCL group companies which many have not seen but will in the next 2-5 years provider a stimulus to the revenues and earnings. And even as KPLC styles up cables will still make money.

Cables is one of the few well run local companies in terms of management quality,board and overall strategic direction. Even debt taken was to optimize on the cost of capital. There was no cash problems just a few working capital challenges brought about by tanesco orders,as tanesco was taking slightly longer than expected to pay bt they did pay,typical of government procurement. Cables will always pay a dividend because TCL needs cash to fund its deal pipeline. Its strategy is very much influenced by TCL so even as they expand expect them to make good returns. There are very good private equity brains sitting in TCL by the way.

As for the slowdown,cables biggest market is private developers,basically copper business,obviously building and construction has slowed down but we all know the deficit of housing,commercial offices,malls,warehouses etc. and as this deficit is sorted out,cables will be sitting pretty enjoying the good times. I would definately buy cables ahead of the HFCK as an option to the housing market in Kenya. Its a good long term stock