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Integrated Micro-Electronics, Inc. (IMI) brought 2018 to a close with consolidated revenues of $1.35 billion (PhP70.81 billion), an increase of 24% year-on-year. The company posted a net income of $45.5 million (PhP2.39 billion), 34% higher than the prior year including favorable non-operating items. Gross profit grew 5%, however, gross profit margin declined to 10.1% from 11.9% partly due to tight supplies of electronic components.
IMI’s traditional business delivered $1.04 billion revenues, a growth of 16% while recently acquired companies, VIA and STI, accelerated further with a growth of 61% year-on-year posting a combined revenue of $312.4 million. The company benefited from new programs in the industrial and automotive segments which grew 41% and 21%, respectively, while strong activities firmed up for strategic opportunities in aerospace.
The reported net income includes non-operating items such as net gain on the sale of a China entity and reversal of contingent consideration related to the STI acquisition, partially offset by impairment of China goodwill, mark-to-market losses on put options and other one-off transaction costs. The effect of the RMB and EUR depreciation and higher interest rates also added downward pressure. Operationally and excluding foreign exchange impact, net income decreased 21% to $25.8 million.
Arthur Tan, IMI chief executive officer, said, “2018 was a challenging yet exciting year. Although the company was affected financially by the global component shortage issue, we are confident that the choices we made years ago were the right decisions. We remain committed to our strategy to develop complex and high value products that allows us to remain relevant in our focused target markets.”
Also in 2018, the company’s business pipeline expanded with $320 million new project awards, 72% of which are for automotive applications. “This drive to be a critical contributor to the digital car of tomorrow and other technological breakthroughs will enable us to deliver and meet increasing expectations of our stakeholders,” Tan added.
“The imbalance between supply and demand puts pressure in the way we do our business. Building solid relationships with customers and suppliers is the key. We have to establish realistic targets with positive thinking to stay ahead of the game,” Gilles Bernard, IMI president and chief operating officer stated.
Last year, IMI spent $65 million on capital expenditures to build more complex manufacturing capabilities which were funded by proceeds from the stock rights offering.
IMI’s balance sheet remains robust with a current ratio of 1.34:1 and debt-to-equity ratio of 0.80:1.