IMI halts Shenzen operations due to Covid-19 surge

Published March 15, 2022, 4:06 PM

by James A. Loyola

Integrated Micro-Electronics Inc. (IMI), the manufacturing arm of the Ayala group of companies, reported a halt in the operation of its facilities in Shenzhen, China.

In a disclosure to the Philippine Stock Exchange, IMI said it’s Shenzen facilities contribute approximately 10 percent of the company’s total revenues.

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“Due to a recent surge of COVID cases in the Southeastern China, the city of Shenzhen has been placed under lockdown restrictions,” said IMI.

It added that, “In compliance with China’s Government COVID Zero strategy, all non-essential activities have been halted until March 20, 2022 or until further notice.” IMI said it will comply with all state directives and its local management teams are coordinating with government agencies to safeguard the health and welfare of all its employees.

“Close coordination with affected customers and government units concerned is ongoing to help mitigate its negative impact on the business,” the firm said.

IMI reported $326 million in revenues in the third quarter of 2021, a sequential 2 percent growth against the previous quarter and 4 percent better than the same period last year.

Customer orders and the project pipeline remain robust as demand for electronic products outpaces global supply.

However, additional growth and business margins are still suppressed by challenges in the supply chain as new rounds of government mandated restrictions slow down the recovery of major suppliers in the component industry.

Global freight expenses have also risen dramatically with widespread port congestions and shipping container shortages hindering international operations.

IMI gross margins for the third quarter are at 5.6 percent, leading to a net loss of $6.2 million. The first 9 months of the year ends with $973 million of revenues and a net loss of $5.3 million.

 
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