IMI earnings drop due to Shenzhen relocation
INTEGRATED Micro-Electronics, Inc. (IMI) saw its attributable profit decrease by 36% in the first quarter of 2018 amid a doubledigit top-line growth, dragged down by a one-off expense in transferring its Shenzhen facility to another part of the city.
In a disclosure to the stock exchange Thursday, the Ayalaled electronic manufacturing services provider reported a net income attributable to the parent of $5.56 million, lower than the $8.7 million it booked in the same period a year ago.
This includes a one- off expense of $ 3 million, incurred during the transfer of its Shenzhen operations from Liantang Industrial Zone to Pingshan, Shenzhen. The new facility’s floor area was 57% bigger, providing a better manufacturing layout that will enhance the company’s production.
The relocation was prompted by the urban redevelopment projects of the Shenzhen city government.
IMI said its relocation to the new facility in Pingshan was completed in the fourth quarter of 2017.
“The facilities transferred are intended to become operational at the new site under a wholly owned entity IMI Technology ( Shenzhen) Co. Ltd. located in Pingshan district. The old facility is subject to an ongoing sale transaction,” IMI explained.
Without the costs arising from the Shenzhen relocation, the company’s earnings would have stood at $ 8.6 million, still flat from year- ago levels.
IMI’s first- quarter revenues grew by 38% to $ 325.8 million, driven by its automotive, industrial, and telecommunications segments. The company also benefited from its recent acquisitions, which contributed $ 78.7 million to revenues.
“More than half of our first quarter growth was contributed by the capabilities- driven acquisitions in the past two years. The strategies we executed are now creating relevant scales which allowed us to expand our portfolio expertise,” IMI Chief Executive Officer Arthur Tan was quoted as saying in a statement.
Among IMI’s recent acquisitions was German firm Via Optronics Gmbh, a provider of optical bonding and display solutions. The company booked $52.2 million in revenues for the quarter, more than doubling its results from the first quarter of 2017, fueled by its consumer segment.
United Kingdom- based STI Enterprises Ltd., where the company acquired an 80% stake in May 2017, generated $26.6 million in revenues, boosted by the aerospace and industrial sectors.
Meanwhile, IMI’s Europe operations delivered revenues of $ 84.5 million, up 27% year on year, while revenues from Mexican operations grew by 17% to $ 22.4 million. The company’s operations in both markets are driven mostly by the automotive segment’s lighting, controllers, and driver assistance systems.
Operations in China churned out $74.5 million in revenues for the first three months of the year, as the company ramps up new industrial applications and automotive platforms.
The Philippine operations contributed $66.3 million to the company’s revenues, flat from 2017 figures given the declining demand in security and medical device business, despite an increase in new industrial and camera businesses.
“We are seeing the effects of the current component shortages across the various markets that are reflected in longer lead times resulting to higher inventory levels, increased costs to expedite deliveries and higher purchase price. But this situation has not prevented IMI from achieving its target growth,” IMI President and Chief Operating Officer Gilles Bernard said in a statement.
Incorporated in 1980, IMI is the electronics manufacturing arm of the Ayala group. The company provides design and engineering solutions, supply chain solutions, and manufacturing solutions, among others.
IMI recently announced the opening of a new manufacturing site in Serbia by September or October this year, marking its 20th facility in the world.
Shares in IMI dropped 20 centavos or 1.3% to close at P15.20 each at the Philippine Stock Exchange on Thursday. —