Sun | Jan 17, 2021

COVID clean-up bolsters CAC earnings

Published:Friday | September 25, 2020 | 12:12 AM
Steven Marston, chairman and CEO of CAC 2000 Limited.
Steven Marston, chairman and CEO of CAC 2000 Limited.

CAC 2000 Limited, which provides industrial air-cooling solutions, pivoted into a new revenue stream spawned by the coronavirus that has already resulted in higher earnings and the rise of its stock price.

The company launched an indoor environmental quality, or IEQ, initiative designed to mitigate the spread of the COVID-19 virus in offices and confined spaces.

“We managed to rally the team and customers and were able to resume and invoice work on projects for the quarter and expand the scope of IEQ work,” said Chairman and CEO Steven Marston.

IEQ programmes deal with all components of building interiors, such as lighting, thermal comfort and humidity air conditioners that affect employees and customers, he said.

“Note that COVID-19 protocols are continuously changing, but we offer an extensive variety of both preventative and remediation solutions,” Marston added.

The company now offers services to mitigate mould , allergens, dust and biologicals that could adversely affect human health. The service targets offices and factories in which staff are “cooped up” for protracted period indoors.

CAC reduces the concentration of these elements by “diluting the air”, which means they introduce increased quantity of clean and cooled outside air to indoor spaces; ensure proper air flow circulation patterns for quick and effective removal of airborne components; install air purification systems in rooms; and increase servicing of units, especially in heavily trafficked areas.

“Once a zone has been contaminated, we dispatch a team to properly clean the AC unit, along with sanitisation of the area …,” Marston said, adding that the equipment utilised in the exercise includes UV light sterilisers.

CAC 2000 earned $354 million in revenue for the third quarter ending July, compared to $221 million a year earlier. It kept expenses tight, leading to a profit of $28.8 million and a turnaround from a net loss of $42.5 million in the previous year.

The air conditioning company’s financials vacillate from month to month, based on payment flows for projects executed by CAC for clients. But over the nine months that have already elapsed in its current financial year, spanning November to July, revenue and profit have trended higher year-on-year. Total nine-month revenue hit $928 million, up from $738 million; while net profit amounted to $7 million, up from a net loss of $39 million.

Marston says he “sincerely” hopes revenue will continue to grow in the fourth quarter and into the next fiscal year.

Trading in the CAC stock was halted twice on Tuesday with buyers wanting to purchase under $8 a share, but sellers were only willing to part with their holdings at over $14.75, the price at which the stock eventually closed trading.

CAC did not trade on Wednesday. On Thursday, the price was steady at $14.75 on the trade of eight units.

The company’s third-quarter results were initially released on September 16. It provided the catalyst for the market tussle a week later, but still has few buyers and sellers.

Despite closing up by nearly $3 in trading this week, the stock is still down by 1.7 per cent year-to-date.