Integrated Micro-Electronics Inc. (IMI), the manufacturing arm of the Ayala Group, reported a 22 percent increase in first-quarter profit as cost-cutting measures and factory efficiencies offset a stagnant global market for electronic components.

The firm informed the Philippine Stock Exchange that its net income rose to $4.5 million in the three months ended March from $3.7 million in the same period last year.

IMI said the earnings growth was driven by lower financing costs and improved operating leverage, helping cushion the impact of sluggish demand in the automotive and mobility sectors.

“We are pleased with the steady increase in profitability that we have achieved over the last two years. We are now able to remain competitive while generating sustainable value for our stakeholders,” said IMI CEO Louie Hughes.

He added that, “Although we will continue to strive for even better efficiency across all our global locations, our focus now shifts to growing revenue in the correct high-value markets and building on the robust corporate and operational foundation we have shaped.”

Revenue for the quarter reached $220 million, in line with core sales in the same period last year, reflecting overall pipeline stability even with continued sluggishness in some mobility-related segments.

While topline growth was flat, IMI achieved stronger earnings performance through sustained cost discipline and operational efficiency initiatives.

Gross profit margin expanded to 9.7 percent in the first quarter of 2026, up from 8.7 percent in the same period last year, primarily driven by increased factory utilization, better pricing discipline and continued benefits from factory footprint optimization.

Earnings before interest, taxes, depreciation, and amortization increased to $15.5 million from $14.6 million owing to stronger operating leverage, reduced overheads, and improved program execution.

“These results are the product of the continued implementation of IMI’s multi-year transformation program which focuses on consolidating the company’s global manufacturing footprint, enhancing cost competitiveness, and increasing financial resilience,” IMI said.

As a result, capacity utilization increased, labor productivity improved, and fixed overhead costs declined without compromising service continuity to customer partners. This has enabled IMI to remain profitable even in a subdued demand environment.

Utilizing cash generated from operations, IMI further bolstered its balance sheet through continued debt reduction. The lower interest expense in the first quarter of 2026 is due to the ongoing efforts of the company to deleverage and improve capital structure efficiency, in order to maintain financial flexibility for future investments.

Current geopolitical developments, including the conflict in the Middle East, have not had a material impact on IMI’s business operations.

The company said it continues to actively monitor global supply chain conditions and is collaborating closely with customers and suppliers to proactively mitigate any disruptions, particularly around logistics routing, component availability, and lead-time variability. (James A. Loyola)