Ayala electronics subsidiary suffers big drop in profits

MANILA, Philippines – The Ayala-led Integrated Micro-Electronics Inc. booked a 76-percent year-on-year drop in first semester net profit to $1.1 million due to higher input and labor costs.

This was so even though consolidated sales revenues jumped by 39 percent to $262.5 million from a year ago due to the strong performance of its China operations and additional revenues from PSi Technologies Inc.

For the second quarter alone, net income attributable to equity holders of the parent company amounted to $761,000, down from $1.49 million in the same period last year. Revenues from April to June jumped to $139.5 million compared to $98.27 million in the same period last year.

“We managed to grow our revenues and stay profitable despite a still fragile global economy. The vibrant and challenging times compel us to give more focus on operational excellence to increase productivity and reduce costs,” IMI president Arthur Tan said.

The company’s operations in China and Singapore chalked up $143.3 million in revenues for the six-month period, up by 23 percent from a year ago, on the back of new ‘turnkey” programs for major customers.

“Turnkey” refers to a complete manufacturing function that provides all manufacturing and supply chain services, including material acquisition, assembly, test, and aftermarket service and warranty support.

“Our diversification strategy across different markets and regions will help cushion the impact of any isolated downturn on our future performance. With our expanded footprint in Europe and Mexico, we have vital access to more markets, allowing us to participate actively in providing solutions for original equipment manufacturers catering for regional and international demands,” Tan said.

Cash balance at the end of the period amounted to $32.7 million.