APWC — Q2 2026 Financial Report Analysis

Asia Pacific Wire & Cable (APWC), which makes power cable, enameled wire and telecom cable in Thailand, Singapore, Australia and China, grew second-quarter 2026 revenue 7.7% to $136.6 million. The company actually shipped less copper than a year earlier, though: copper tonnage fell 7%. The sales gain came from higher copper prices passed through to customers and from public-sector contracts in Thailand. Operating profit rose 37% to $3.4 million. Earnings per share still fell from $0.03 to $0.01, because the company doubled its share count in February 2026. Operations also used $18.0 million of cash as APWC stockpiled copper for contract deliveries.

At a glance

• Revenue +7.7% while copper volume fell 7%. Price, not quantity, drove the top line. Copper costs are largely passed through, so a higher copper price inflates sales without necessarily adding profit.
• Gross margin 8.1% vs 6.8%. That is the share of revenue left after the cost of making the cable. It widened by 1.3 percentage points, which management credits to higher copper prices and public-sector orders.
• Operating cash flow –$18.0 million against $2.2 million of profit. Inventory jumped $20.7 million in the quarter, and short-term borrowing rose to fund it.

Results

All figures are in US dollars, under IFRS (the international accounting standard APWC reports under). "Net income" here means profit attributable to APWC's own shareholders, after removing the share that belongs to minority owners of its partly owned subsidiaries.

Operating margin is the share of revenue left after running the business (production, selling and administration) and before interest and tax. At 2.5%, APWC keeps about 2.5 cents of operating profit on each dollar of sales. That is thin even for a cable maker, because most of the selling price is copper bought in at market prices.

Where the revenue came from

• Thailand (+17%): management credits "strong execution of public-sector orders and private-sector investment in manufacturing, supported by rising copper prices."
• North Asia (+29% YoY, +23% vs Q1): the company points to "the continued upward trend in copper prices, as well as seasonal factors that boosted sales volume" versus the first quarter.
• Rest of World (–7%): this was the only segment to shrink, "primarily reflecting temporary market constraints in Singapore." The release does not say what those constraints are. Rest of World is still APWC's largest segment, so whether Singapore recovers matters for the second half.

Over the first half, revenue was $267.5 million, up 17.6% from $227.5 million. Operating profit was $6.7 million, against a $0.3 million operating loss in the first half of 2025, so the turnaround is clearer on a six-month view than in this one quarter.

Why margins improved, and what offset it

Gross profit rose 28% to $11.0 million, faster than revenue. Management attributes the gain to "higher copper prices and robust demand for public sector orders." A likely mechanism, which is our inference rather than something the company states, is that copper bought earlier at lower prices was sold at higher current prices. That benefit reverses if copper falls.

Selling, general and administrative expenses rose 19.5% to $7.7 million, "primarily due to higher research and development costs and increased selling expenses." Costs grew faster than sales, which took back part of the gross-margin gain. Operating profit rose $0.9 million, against a $2.4 million rise in gross profit.

What the headline numbers hide

• EPS fell because of dilution, not weaker operations. Profit attributable to shareholders rose 35% ($781K vs $578K), but the weighted share count doubled from 20.6 million to 41.2 million after new shares were issued in February 2026. Issued capital went from $206K to $413K at $0.01 par, and additional paid-in capital rose $33.9 million. The reported –67% is also partly a rounding artefact. Dividing profit by the share count gives about $0.019 per share against $0.028, a decline of roughly a third.
• Minority owners took most of the profit. Of the $2.2 million total profit, $1.4 million (64%) went to non-controlling interests, the outside shareholders of APWC's partly owned operating subsidiaries. APWC's own shareholders kept $0.8 million.
• Cash conversion was poor. Operating cash flow was –$18.0 million in the quarter and –$16.4 million for the first half, against first-half profit of $5.3 million. Inventory reached $171.3 million, up $20.7 million in the quarter and 13% since December. Management says the build was "mainly attributable to raw material accumulation required to fulfill public-sector contract delivery schedules." Trade receivables, the money customers owe, rose 8.8% since December to $112.7 million. That is slower than first-half revenue growth, so collections are not the problem; the cash went into inventory.
• The cash was paid for with borrowing. Cash fell $8.6 million in the quarter to $64.6 million. Short-term interest-bearing borrowings rose to $58.5 million from $41.8 million at year-end, and amounts due to related parties nearly doubled to $17.2 million. Without the February equity raise ($51.1 million of first-half financing inflows), the balance sheet would be in debt. With it, cash still exceeds borrowings by only about $6 million.
• The tax rate was high. Income tax was $1.37 million on $3.57 million of pre-tax profit, a 38% effective rate against 36% a year earlier. That held back the bottom line rather than helping it.
• First-half profit includes a one-off. A $1.0 million gain on disposal of an investment was booked in Q1 and is not in Q2. It explains much of why Q2 net income fell 43% from Q1 even though operating profit was flat quarter on quarter.

Takeaway: APWC's Q2 improvement was a copper-price quarter, not a volume quarter. Revenue rose 7.7% on 7% less copper shipped, margins widened, and operating profit rose 37%. But the business paid for that with $18 million of operating cash outflow and more short-term debt. Per-share earnings fell by two-thirds once the doubled share count is counted. The improvement depends on copper prices staying high.

Outlook

The release gives no financial guidance. What the filing does show:

• Contract deliveries should release cash. Inventory was built for "existing customer contracts," mostly public-sector work. If those deliveries ship and are invoiced in the second half, some of the $20.7 million inventory build should come back as cash. If inventory keeps rising in Q3, that suggests delays or more stockpiling.
• Copper is the swing factor in both directions. Higher copper prices lifted revenue and gross margin. A fall would cut revenue and could leave APWC holding expensive inventory with a margin squeeze.
• Singapore. The "temporary" constraints behind the 7% Rest of World decline need to ease for the group to grow in volume rather than only in price.
• Per-share comparisons get easier from Q3. The February share issuance was fully in Q2's count. Once the year-ago quarters also include the new shares (from Q1 2027 onward), EPS comparisons will show the operating trend more cleanly. Until then, profit attributable to shareholders is the better measure than EPS.

Our read: operations are improving, with first-half operating profit up from a loss to $6.7 million. But the margin gain depends on copper prices, and the cash flow and growing short-term debt are the numbers to watch in Q3.