Sierra Cables wins Rs. 873 m Govt. tender

Friday, 9 March 2018 00:00 - - {{hitsCtrl.values.hits}}

Sierra Cables Plc has won a Rs. 873 million Government tender for the supply of 1,500 km of Arial Bundle Cable ABC.

The tender was awarded by the Power and Renewable Energy Ministry. The company said the order would be manufactured, supplied and invoiced from March to June 2018. The value of the tender accounts for 22% of Sierra Cables’ FY17 turnover.

In the nine months ended 31 December 2017, Sierra Cables Plc recorded a revenue of Rs. 2.88 billion, marginally down from Rs. 3.02 billion achieved a year earlier. The company suffered a pre-tax loss of Rs. 29 million against a profit of Rs. 322 million.

This is owing to a higher cost of sales, amounting to Rs. 2.48 billion, up from Rs. 2.36 billion, leading to a gross profit of Rs. 395.1 million, down from Rs. 664 million in the first nine months of the last financial year.

Higher administrative expenses (Rs. 102 million, up from Rs. 70 million) saw profit from operations decline to Rs. 106 million from Rs. 428 million. Higher finance cost (up to Rs. 138.8 million from Rs. 106 million) saw pre-tax loss of Rs. 29 million, as against a profit of Rs. 322 million.

In FY17, turnover amounted to Rs. 4.04 billion, up from Rs. 3.03 billion in FY16. Pre-tax was Rs. 347.7 million, as against Rs. 273 million, and after-tax profit rose to Rs. 265.5 million from Rs. 193 million in FY16.

In FY17, Sierra said it was one of the main contributors to the national level electrification program as a key supplier to the Ceylon Electricity Board (CEB). In 2016, Sierra Cables supplied the entire cable requirements of the high-end ‘Shangri-La Hambantota’ project and secured an order to cater to the cable requirements of the ’Iconic Development’ project in Rajagiriya.

In line with its growth strategies, in FY17, Sierra Cables entered into a joint venture agreement with three Fijian companies to start a $ 4 million power cable manufacturing plant in the Pacific island nation.

This investment enables Sierra Cables to tap the cable markets in New Zealand, Australia and Papua New Guinea.

Its previous venture into the East African market through a manufacturing plant in Kenya has delivered positive results in terms of tenders and market growth.

In preparation to cater to the growing export market, the company took steps to obtain international standard certifications.

In 2016, Sierra Cables East Africa Ltd. (SCEAL), the group’s first ever overseas venture, secured the first order from the Kenyan Rural Electrification Authority (REA). Both SCEAL and the recently initiated plant in Fiji are expected to show considerable performance growth in the near future, the company’s 2017 Annual Report said.