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Sunday, July 4, 2010

Sierra Cables - A rising star for the future

Sierra Cables PLC, together with its subsidiaries, engages in the manufacture and sale of wires and cables in Sri Lanka. Its products include power and communication cables, enamel winding wire, and various aluminum conductors.

The company is based in Colombo, Sri Lanka. Sierra Cables PLC is a subsidiary of Sierra Holdings (Private) Limited.

Sierra Cables PLC is the Holding Company of Alucop Cables Ltd, Alucop Marketing (Pvt) Ltd. and Sierra Engineering and Construction (Pvt) Ltd. who carry out the operational aspects of manufacturing and marketing of cables.

About Alucop Cables Ltd.

Alucop Cables Ltd. ( a wholly owned subsidiary of Sierra Cables PLC, a company listed in the Colombo
stock exchange) is one of the largest cable manufacturers in Sri Lanka manufacturing products ranging
from Low Voltage Power Cables, Enamel Winding Wires, Aerial Bundle Conductors, Armored and Un‐
Armored Cables, Co‐axial Cables, Antenna Cables etc. Alucop is an ISO 9001 certified.

The Company Manufacture power cables single core up to 1000mm2, Four core up to 300 mm2, Enamelled winding wire from 0.1 mm to 4.00 mm. Total Production capacity is more than 6000MT per Year.

Comparison - Sierra Cables Vs Other Major Competitors

	Sierra Cables	Acl Cables	Kelani Cables
Annual Profit 31/03/2010 (Rs)	108,148	(949)	163,173
Annual Profit 31/03/2009 (Rs)	26,342	131,008	94,968
E.P.S as at 31/03/2010 (Rs)	0.20	(0.01)	7.49
N.A.V. (Rs)	2.56	61.41	70.33
Assets (Rs)	2,071,010	8,193,931	2,432,382
Liabilities (Rs)	695,775	3,995,166	899,128
Price as at 02/07/2010	3.60	94.00	130.00
Share Capital	537,512	59,893	21,800

Why Sierra ?

Products of Sierra cables targeted one of growth sectors (Construction) in post war Sri Lanka.

Kelani Cables reported a loss of Rs 1.1m.n for the last 03 months ended 31/03/2010 as against a profit of Rs 73m.n reported for the same period in year 2009. This reflect an EPS of Rs (0.05) as at 31/03/2010.

ACL Cables reported a loss of Rs 51,971 for the last 03 months ended 31/03/2010 as against a loss of Rs 13,296 reported for the same period in year 2009. This reflects an EPS of Rs (0.87) as at 31/03/2010.

However Sierra Cables reported a profit of Rs 83.1m.n for the last 06 months (Sierra represents Diri savi board) ended 31/03/2010 as against a profit of Rs 36.5m.n reported in year 2009.

Sierra Cables is the second largest share holder of Central Industries PLC owned by Central Finance PLC. Sierra Cables owns 16.02% or 527,951 shares of CIND as at 31/03/2010. CIND share closed at Rs 280.00 at Colombo Stock Exchange on 02/07/2010.

Sierra Cables reported history best price was Rs 4.00. The IPO which was came to the market in year 2005 was priced @ Rs 3.00 /share. This clearly indicates that the future upside potential of Sierra Cables. It shows us a long overdue position for the price appreciation.

Sierra Cables is well positioned to cater the growing demand for the cables from North & Earth reconstruction activities. Their fully owned subsidiary Company Alucop Cables has already invested in new machinery and processors and trained the staff intensively over the last two /three years to meet the anticipated demand.

Alucop Cables has introduced the Areial Bundle Conductors (ABC) very recently to cater the huge demand arising from the infrastructure development activities in the post war Sri Lanka.

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