Cables firm losses down 21pc after factory revamp

East African Cables has cut its losses by 21.4 per cent boosted by modernisation  of factory  leading to greater production efficiency.

The company reported net losses of Sh582.6 million in the year to December 2016, down from Sh741.2 million in 2015. Revenues however fell by a marginal two per cent to Sh3.7 billion. The firm  attributed this to falling metal prices in London.

E.A. Cables says that it is betting on expanded production, improved relations with key suppliers and customers to return to profitability.

“...the group has strengthened its relations with key suppliers for sustained supply of raw materials at just-in-time program while at the same time focusing on shorter collection periods with its customers to improve its cash flows,” the firm said.

E.A. Cables hopes to reduce interest costs and to refinance current credit facilities as it seeks more working capital.

The firm manufactures copper cables and conductors for the energy sector. It recorded positive performance in 2014 when it posted a profit after tax of Sh341 million.

E.A. Cables has come under intense pressure by cheap imports from india and china, as well as smuggled but often substandard cables.

The firm has two factories, one in Kenya and another in Tanzania. Last year, it said that its Nairobi facility was operating below capacity partly due to competition from these cheap imports.

E.A Cables has in the past said that it is counting on Kenya’s ambitious plans to expand electricity connection under  the Last Mile project to boost its profits.  In May last year, the firm said that it had received a Sh2 billion order for cables from Kenya Power.

However, Kenya Power later in the year warned that it would import cables if local firms failed to meet its demand.