By James A. Loyola
Integrated Micro-Electronics, Inc. (IMI), the manufacturing arm of the Ayala Group, reported that net income fell to $451,000 in the first three quarters of 2019 from US$41.4 million in the same period last year.
In a disclosure to the Philippine Stock Exchange, IMI said its net income for the period under review includes a provision for non-recurring deferred expenses of US$5.2 million.
IMI achieved US$939.6 million of consolidated revenues in the first nine months of 2019, seven percent lower than the same period last year due to “the persistent slowdown in IMI’s main market segments, compounded by various geo-political issues have hindered growth.”
A lingering contraction in the automotive space, particularly in China, has brought down customer demand forecasts that led to challenged margins as new manufacturing lines are temporarily underutilized.
Its gross profit of US$79.1 million, representing an 8.4 percent margin, is a 26 percent decline versus the same period last year.
New business wins from the pipeline remain healthy at US$295.0 million year to date.
IMI’s wholly-owned businesses had US$755.2 million of revenues, a three percent reduction from the same period last year.
China’s domestic market challenges prove to be the biggest drag, with IMI’s factories in the region showing a 22 percent decline versus the same period in 2018.
Despite the global slowdown, the company’s Mexico and Bulgaria/Serbia operations showed a growth of 66 percent and three percent, respectively.
Via Optronics and STI Enterprises, Ltd. posted revenues of US$184.4 million, a 20 percent decline against the same period last year. The delays in the production of the next generation computer processors affected VIA’s consumer laptop business.
The company remains committed to serve the market as the segment rebounds and rolls out new products by the end of the year.
Continued political tensions in the UK depressed revenue growth in STI, down by 11 percent. However, the company expects business to improve, having won US$69.0 million of new business projects in the first nine months of 2019.