China business pulls down Ayala unit profit

Ayala-led Integrated Micro-Electronics Inc. (IMI), one of the world’s leading providers of electronics manufacturing services (EMS), posted a 1.5-percent year-on-year decline in first semester net profit to $15 million due to slower business in China.

Operating income for the period, however, improved by 19 percent year-on-year to $20.7 million despite a slight decrease in revenues.

IMI president and chief operating officer Gilles Bernard said: “The improvement in operating income came about as we expanded business in higher-margin segments of automotive and industrial. Line productivity and cost-saving programs also had a positive impact.”

Six-month revenues dropped by 1.6 percent year-on-year to $409.7 million, weighed down by the decline in business in China.

IMI’s China operations posted $130.4 million in revenues, down by 10.7 percent year-on-year, mainly due to the weak performance of the consumer electronics lines. The telecommunications infrastructure business, however, grew 6.8 percent year-on-year.

Revenues from IMI’s operations in the Philippines remained flat at $109.6 million. Lines for automotive cameras, security and access controls, asset tag sensors and lighting controls continued to grow, partially offsetting the weak storage device business.

On the other hand, IMI’s Europe and Mexico operations recorded $153.4 million in revenues in the first half, rising by 11.5 percent year-on-year, as the demand for automotive body controls and lighting systems that IMI assembles in Bulgaria and Czech Republic increased. In Mexico, revenues increased by 8.5 percent due to the strong performance of IMI’s plastic injection and assembly lines.

Capital investments in the first half reached $23.2 million, mainly for Mexico, Bulgaria, China and the Philippines to support line expansion. The ramping up of production volume in the automotive and industrial lines is set to start in the fourth quarter of the year.

IMI chief executive officer Arthur Tan said, “We continue expanding our lines, preparing them for the next wave of positive trends.”

“The relentless rise in technology innovations is giving businesses speed and agility and driving performance to ensure business success. We are optimistic that IMI has what it takes to remain relevant and on top of tech developments and trends down the road,” Tan added. Doris Dumlao-Abadilla