Unisem says US trade war will affect its earnings

PETALING JAYA: Semiconductor company Unisem (M) Bhd said a protracted trade war between the United States and other major economies would have an adverse impact on its operations.

Its net profit fell 27% to RM31 mil in the second quarter ended June 30, as revenue dropped 6% to RM343 mil. Cumulative six-month earnings stood at RM37.2 mil.

Unisem attributed the decline in earnings to unfavourable exchange rates and lower margins due to a change in product mix.

Looking ahead, the company is wary about the escalating trade war between the United States and the rest of the world.

Unisem owns assembly and testing facilities in Malaysia, China and Indonesia. Its main markets are the United States, Europe and China.

It said protectionist policies and tariffs imposed by the United States on imports from China, the European Union, and other countries and the retaliatory measures would eventually have the effect of reducing global trade.

“Whilst the company is currently unaffected by these measures so far, any protracted impasse would have some adverse impact on our operations. Barring a protracted trade war and a consequential deterioration in global trade, the directors expect the performance of the group to remain satisfactory for the remaining period to the end of the financial year,” it said.

The stock was traded seven sen down to RM2.59, giving it a market capitalisation of RM1.9bil.