IMI posts lower Q2 income

MANILA, Philippines - Ayala-owned Integrated Microelectronics Inc. (IMI) posted lower profits in the second quarter on the back of higher costs and lower utilization of its facilities in China.

However, the firm said it is taking advantage of manufacturing opportunities in North America and Europe for the rest of the year to offset the decline in China.

In a regulatory filing, IMI said its net income dropped nearly 19 percent to $1.83 million in the second quarter from $2.25 million a year ago.

Revenues from sales and services picked up 6.88 percent to $185.65 million from $173.68 million. However, cost of goods sold rose at a faster pace to $170.59 million, up 7.6 percent from $158.51 million last year.

The latest figures allowed IMI to record a $2.08-million net income in the first half, 33 percent lower than the $3.1 million profit a year ago “due primarily to lower capacity utilization in its China facilities,” the company said.

“We continue to grow our top line and record a profit despite the unbalanced growth of the global economy,” said IMI president and CEO Arthur Tan.

IMI has started to consolidate operations in China to lessen the impact on its bottom line, Tan said.

In the first semester, revenues rose nearly eight percent to $350.46 million from $325.65 million last year “due mainly to the company’s strong business expansion in Europe, Mexico and the Philippines,” IMI said.

But it was offset by the 8.35-percent growth in cost of goods sold to $325.32 million from $300.25 million last year.

IMI’s China and Singapore operations accounted for 35 percent of the total first-half revenues or $122.2 million, dropping nine percent year-on-year “due primarily to reduced sales in the telecommunication infrastructure segment,” IMI said.

Operations in Europe and Mexico recorded combined revenues of $117.1 million, surging 37 percent year-on-year “due to the continued expansion of the company’s automotive business,” IMI said.

Revenues from IMI’s Philippine operations grew 11 percent to $88.4 million on the back of strong programs in the computing, consumer and industrial segments.

Subsidiary PSi Technologies Inc. recorded an eight-percent decline in revenues to $23 million.

Moving forward, the firm is banking on better performance in Europe and North America.

“While we are affected by the slowdown in China, we take advantage of opportunities in regional manufacturing in North America and Europe,” Tan noted.

For instance, IMI continues to expand its operations in Bulgaria and Mexico to accommodate additional orders from its customers in the automotive sector.

“We are aggressively pursuing opportunities to increase both revenues and profit margins as we leverage our broadened geographic presence and expanded capabilities,” Tan said.

“Our diversification strategy is doing us good in these volatile times,” he added.

IMI aims to hit $1-billion revenues by 2016 as it serves more energy, mobility, power, healthcare, industrial and security firms.

The 20th largest provider of electronics manufacturing services in the world will spend $18 million this year to expand regional operations.