Ionics sells 50% stake in unit to joint venture partner

Ionics Inc. has completed the sale of its 50-percent interest in Andes Ionics Inc. (AII) to its joint venture partner Andes Electronic Co. Ltd. of Japan for P69.15 million.

In a disclosure to the Philippine Stock Exchange, Ionics said AII, which is now 100-percent owned by Andes Electronic, will be renamed and continue its operation in its present location.

Ionics Properties Inc. will continue to rent its property to AII for a period of three years. Ionics is a holding company that invests directly or indirectly in companies or activities which are engaged in the technology industry, including networking, telecommunications and Internet.

The company incurred a net loss of P65.64 million last year, a reversal of the P205.55 million profit recorded in 2001.

Ionics attributed its dismal performance to soft global market demand resulting from the industry and economy slowdown in 2002.

The group’s consolidated sales went down by 29 percent to P10.39 billion. As a result of the decrease in volume of sales, the consolidated cost of sales decreased to P10.19 billion from P13.61 billion.

Due to strong budgetary controls and cost-cutting measures, consolidated operating expenses declined to P272.9 million from P309.7 million. As a percentage of sales, operating expense remained at two percent in 2002.

From a non-operating expense of P38.1 million, the group posted a net operating income of P66.9 million due to lower interest and loan balance and foreign exchange gain of P25.7 million.

Also, the group reported other income of P59.9 million resulting from the disposal of the parent company’s land and building no longer used in EMS operations as well as the sale of certain discontinued lines of EMS to a customer.

As of end-December 2002, the consolidated assets of the group amounted to P7 billion, down by 24.65 percent.

The decrease in receivable and inventory level caused by lower production volumes and the depreciation of property, plant and equipment account for the decline in total assets.

The group said its current ratio improved from 116 percent in 2001 to 181 percent in 2002.

The debt-to-equity ratio also improved from 94 percent in 2001 to 50 percent in 2002.

The significant improvement resulted from the decrease in accounts payable due to lower production volumes and the payment of matured bank loans.