By James A. Loyola
Integrated Micro-Electronics, Inc. (IMI), the Ayala group’s manufacturing arm, reported a consolidated net loss of US$13.2 million last year from a profit of $48.78 million in 2018.
In a disclosure to the Philippine Stock Exchange, the firm said there was a 7 percent drop in consolidated revenues to US$1.25 billion last year from P1.35 billion in 2018.
“The marked slowdown in global markets continues to hinder revenue growth across majority of IMI’s operating units,” IMI said.
It added that, significant investments in capacity and technical capabilities for growth areas also increased overhead expenditures partly impacting its gross profit margins.
The full year gross profit of $102.2 million with an 8.2 percent margin declined versus 2018 margin of 10 percent.
A softer fourth quarter operating performance plus additional reserves including inventory and other provisions of $5.3 million and valuation reserve on deferred tax assets of about $2.8 million, resulted in a full year net loss of $7.8 million.
New business wins remain healthy at $407 million annual revenue potential across all IMI EMS facilities.
IMI’s wholly owned businesses made $1 billion of revenues, a three percent reduction from 2018. The company’s Asian operating units dropped a total of 11 percent as China’s domestic market, particularly in the automotive space, continues to underperform.
IMI Europe, which is largely automotive based, achieved a three percent growth year-on-year through the company’s newest production facility in Serbia despite the widespread industry slowdown and the Euro depreciation.
Mexico, which serves the US market, continues to show a strong positive trajectory with a 50 percent revenue growth in 2019.
Via Optronics and STI, Ltd. posted combined revenues of $248 million, a decline of 21 percent from the previous year. The drop in VIA was mainly driven by the slump in the computing consumer segment and the delay in the release of the new generation Intel chip.
Meanwhile, the Brexit uncertainty caused the delays in STI’s program awards. STI, however, continues to have a strong pipeline wins amounting to $124 million in 2019.
“Despite the continuing decline of the market environment, we are resolute in setting the bar to key technological advancements and remain ahead of the curve,” said IMI Chief Executive Arthur Tan.
He added that, “With our resilience, along with our technical expertise and commitment to quality manufacturing, I’m confident that we shall continue to win significant businesses in emerging technology platforms.”
“As the adoption of these new products begins to accelerate, we will relentlessly take the necessary steps to achieve sustainable returns as we pull through this current market situation,” noted Tan.