THE COMPANY: Sicable, a subsidiary of Prysmian Energy Systems and Cables, is the main cable manufacturer in Côte d’Ivoire. It sells products ranging from high-voltage cables to low- and medium-voltage cables for houses to the national market. Sicable also exports to other neighbouring countries that share the same French standards, and its market extends across the region all the way to Cameroon.
The electricity cable market in Côte d’Ivoire and in the sub-region is highly competitive, with other brands coming from South and North Africa. Growing North African and South African competition is more on price than quality, and has resulted in a drop in prices. Consequently, Sicable is redefining its marketing strategy, becoming more aggressive commercially, and has placed greater emphasis on its much better brand-name recognition.
Net revenues in 2012 grew 38% to stand at CFA8.25bn (€137.6m). These revenues are mainly composed of the sales of goods, at CFA1.1bn (€1.7m), and manufactured cables, at CFA7.1bn, (€10.7m), representing 13% and 86% of total revenue, respectively, in 2012. The goods sold by the firm include high-voltage cables that are manufactured by its parent company, Prysmian.
The volume of cables manufactured totalled 1653 tonnes in 2012 against 1280 tonnes in 2011, an increase of 29.1%. Cable production is set to rise another 31.9% to 1688 tonnes going forward. This production increase is related to the resumption of activities in Côte d’Ivoire after the resolution of the 2010-11 crisis. As various reconstruction projects in Côte d’Ivoire have moved forward, Sicable’s activity in its local market has expanded considerably.
The total net revenues of Sicable in the local market have seen an increase of 51% in value and 45% in volume. This is due to a rise in orders from major customers in distribution and general business. This has improved the EBITDA margin from 15.1% in 2011 to 29.6% in 2012, because Sicable’s margin is better on the local market than on the export one. EBITDA in 2012 was CFA2.4bn (€3.6m) against CFA906m (€1.4m) in 2011. This 169.7% growth is due to the combined effect of higher net revenues and a reduction in operating cost. Net profits multiplied by 2.85 to reach CFA971m (€1.5m).
Sicable has a strong financial structure to fund its working capital requirements and generates a good level of liquidity: it has a net income of CFA4.5bn (€6.8m). The debt level is zero and the cash flow of the company remains at satisfactory levels. In 2012, despite an 11% drop in the inventory account, working capital required increased by 95%. This rise resulted from the 22% drop in account payables due to a reduction of the repayment period from 221 days to 118 days. We expect an 8.62% increase in revenues in 2013. This growth should come primarily from the sharp increase in the number of public works projects begun in 2012 and the start of new government initiatives, such as the building of the Abidjan-Bassam highway, the construction of some luxury hotels, the rehabilitation of public and private facilities including hospitals, and the construction of the CIPREL 4 thermal power plant.
DEVELOPMENT STRATEGY: Going forward, Sicable will emphasise the following four points:
• Remaining cautious about customer risk and being attentive to the opportunities that arise.
• Taking steps to regain the level of efficiency lost during the crisis period.
• Trying to recover export position and ties with its former customers.
• Covering the company’s short-term financing needs with equity to kick-start operations.
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