Pacific Electric Wire & Cable Company Limited: A Comprehensive Look at Its Financial Strength

Founded in 1967, Pacific Electric Wire & Cable Company Limited (PEWCC) is one of the leading suppliers of high-quality electrical and electronic components in the world. In the last few decades, it has become a key player in the power transmission industry in Asia and beyond. The company is well known for its range of products such as cables, wires, switches, transformers, and more. With its immense financial strength and efficient operations, PEWCC has grown to become a major multinational company with presence in over 70 countries.

Thanks to its long-term stability, PEWCC has always been able to generate consistent profits even during times of economic crisis. This includes a steady growth in revenues, while maintaining reasonable spending levels. Through a combination of innovative methods, efficient production processes, and strong financial management, PEWCC has managed to remain a leader in its field. As a result, the company currently holds a solid 5-A+ rating from S&P Global Ratings and an AA+ rating from Moody's Investors Service.

Financial Highlights

The financial performance of PEWCC has been impressive over the years. For the year 2020, the company reported strong financial results. Total sales increased by 15% from the prior year to reach US$7.2 billion. Furthermore, the company achieved net profit of US$619 million, which represented an increase of 22.4% over the prior year.

At the same time, the company has maintained a moderate level of debt over the last decade. While the company does have some short-term debt, it is mainly composed of long-term loans and bonds. As of December 2020, the company reported total debt amounting to US$8.5 billion, representing 32% of total assets. Furthermore, the company's current ratio of 1.2 and quick ratio of 0.99 are both above the industry average, demonstrating PEWCC's capacity to service its current liabilities.

Investment Policy

In order to ensure its long-term financial success, PEWCC has adopted a conservative approach to managing investments. The majority of the company's investments are in safe vehicles such as treasury bills, bonds, and money market funds. Over the years, PEWCC has also increased its investments in stocks and mutual funds, as a means of diversifying its portfolio and reducing risk.

The company has also made direct investments into projects with high potential for return. For instance, in 2019, PEWCC invested US$200 million in the development of an electric vehicle factory in India. This project is estimated to generate a return on investment of 25% over the next decade.

Dividend Policy

PEWCC has been paying loyal shareholders generous dividends, which have been increasing steadily over time. In 2020, the company made cash dividend payments totaling US$1.2 billion, representing a payout ratio of 20%. This rate is slightly higher than the industry average, indicating that PEWCC is committed to rewarding its investors.

Additionally, the company is planning to expand its dividend policy in 2021, with a record $1.3 billion in payments. This has been made possible thanks to the company's continued success and the confident outlook for the future.