IMI posts lower Q3 profit

MANILA, Philippines - Ayala-led semiconductor firm Integrated Micro-Electronics Inc. (IMI) reported a 30 percent drop in its net earnings in the third quarter, largely due to lower revenues.

In a disclosure to the Philippine Stock Exchange, IMI said its net income declined to $6.82 million in the July to September period from P9.78 million a year ago.

Revenues fell to $205 million from $219 million due to weaker operations in China.

This brings the company’s total earnings to $22 million for the first nine months, slightly higher than the $21 million recorded the previous year.

IMI president and CEO Arthur Tan said the company booked an increase in nine-month profit during the nine-month period despite the global economic slowdown because of operational efficiency improvements and expansion of some high-margin customer programs.

“Despite the global economic slowdown and electronics industry downturn, we remained profitable in the first nine months of the year,” he said.

Revenues decreased by four percent to $621.5 million in the nine months ending September due to the downturn in the computing and telecommunications infrastructure segments and a weak Euro which affected sales value.

IMI’s Europe and Mexico operations benefitted from their robust automotive business and recorded combined revenues of $204 million from January to September, one percent higher than the year earlier.

Tan said revenues would have risen by 17 percent if not for the weakening euro.

In the Philippines, IMI’s EMS or electronics manufacturing services registered $168.5 million in revenues, up one percent year on year.

IMI’s China operations, on the other hand, saw its revenues decline by 13 percent to $214.3 million as a result of lower orders from a few consumer electronics customers and as the 4G telecommunications network rollout reached its peak.

“We expected the decline in telecom network infrastructure capital expenditure in China. Fortunately, our businesses in the Philippines, Eastern Europe, and Mexico are doing well and compensate for the deficiency in the Chinese market,” he said.

Tan admitted the slowdown in China’s economy has affected the company’s ability to gain new programs in the Asian country but noted this would be short lived.

“The changes that are being implemented by the Chinese government are necessary for long-term stability of their economy. China will continue to be a relevant world economic market and so IMI will continue to be dependent on it,” Tan said.