East African Cables bags Sh48m Kenya Power deal

Electrical and communications wires manufacturer East African Cables #ticker:CABL has bagged a deal to supply electrical wires worth Sh48 million to electricity distributor Kenya Power #ticker:KPLC amid efforts to turn around the loss-making company.

Kenya Power revealed the contract in a tender document. The utility firm sources its cables from local and overseas markets including India and China.

The deal comes as a boost for the struggling cable maker which is battling to reverse a persistent plunge in revenue that stood at Sh2.3 billion in the year ended December 2017, nearly half their peak of Sh5.1 billion in 2014.

The Nairobi Securities Exchange–listed firm has been in the red since 2015 when it posted a Sh741.2 million net loss, reducing to Sh582.6 million a year later but widening to Sh662.8 million in 2017.

The firm is set to release the full-year performance for 2018 after being granted approvals to delay the results by the Capital Markets Authority (CMA).

Its parent firm, TransCentury #ticker:TCL, said recently an ongoing debt restructuring would affect its books as well as those of East African Cables.

“The East Africa Cables has entered into a conditional transaction that may result in a material change in the company and therefore TransCentury Group capital structure and debt profile,” TransCentury said in a cautionary note to investors.