Ayala electronics arm posts 34% profit growth

Ayala-led electronics manufacturer Integrated Micro-Electronics Inc. (IMI) grew its net profit last year by 34 percent year-on-year to $45.5 million on a one-time gain from the sale of an asset in China alongside other nonrecurring items.

Excluding the impact of foreign exchange and interest rate adjustments as well as nonrecurring items, IMI’s core net income for the year declined by 21 percent year-on-year to $25.8 million.

Consolidated revenue rose by 24 percent year-on-year to $1.35 billion. Gross profit improved by 5 percent year-on-year, but gross profit margin declined to 10.1 percent from 11.9 percent partly due to tight supplies of electronic components.

IMI chief executive officer Arthur Tan said: “2018 was a challenging yet exciting year.  Although the company was affected financially by the global component shortage issue, we are confident that the choices we made years ago were the right decisions. We remain committed to our strategy to develop complex and high-value products that allow us to remain relevant in our focused target markets.”

The net income of $45.5 million included non-operating items such as net gain on the sale of a China entity and the reversal of contingent consideration related to the acquisition of British manufacturer STI, partially offset by impairment of China goodwill, mark-to-market losses on put options and other one-off transaction costs.

The renminbi and euro depreciation also added downward pressure alongside higher interest rates.

In 2018, the company’s business pipeline expanded with $320 million in new project awards, 72 percent of which were for automotive applications. “This drive to be a critical contributor to the digital car of tomorrow and other technological breakthroughs will enable us to deliver and meet increasing expectations of our stakeholders,” Tan added.

“The imbalance between supply and demand puts pressure in the way we do our business.  Building solid relationships with customers and suppliers is the key. We have to establish realistic targets with positive thinking to stay ahead of the game,” Gilles Bernard, IMI president and COO, said.

IMI’s traditional business delivered $1.04 billion in revenue last year, up 16 percent while recently acquired companies, VIA and STI, grew by 61 percent year-on-year.