Reading time ( words)
Integrated Micro-Electronics, Inc. (IMI) closed the first six months of 2019 with consolidated revenues of US$636 million, a 5% decline vs last year. Sales were impacted by the slowdown of the global economy, a downturn in the automotive market, and geo-political issues in our key markets in China and the UK. Profitability remains challenged by a lower volume demand on our new programs where we have invested additional fixed overhead, the persistent component shortages which drove higher material prices, and the delays of new generation chipsets affecting Via Optronics revenues. IMI was able to maintain its first quarter gross margins of 9.0% with a gross profit of US$57.0M, down 21% from the same period in 2018. The company ended the first half with US$5.8M net income, a steep decline compared to last year’s first half earnings of US$31.6M.
IMI’s core businesses ended the first half with revenues at US$506M, US$9M lower against the same period in 2018. This segment was adversely affected by the slowdown of the Chinese automotive market as the region reduced its electronic vehicle incentive program. A significant portion of our core revenues through our Bulgaria and Czech Republic operating sites were also held back by the depreciation of the Euro against the US Dollar.
Our subsidiaries Via Optronics and STI, Ltd. posted revenues of US$130M, a 16% decline compared to the first half 2018’s US$154M. The demand for Via’s optical bonding services suffered a temporary slowdown as the release of new computer products were stalled by delays in the rollout of next generation computer chips. Brexit uncertainty continues to push back the STI, Ltd. business as the region evaluates the effects on tariff structures between the UK and the rest of Europe.
Gilles Bernard, IMI President and Chief Operating Officer, said “With significant investments for new technology projects made in the past years, IMI remains ready to serve the upcoming surge in the global electronics market. Unfortunately, political and economic market factors are currently holding back the revenue growth, while also affecting the profitability of the company.” With the negative developments in the past several months, IMI has taken steps to mitigate these financial headwinds. “We shall continue to ensure efficiency as we progress through the extended ramp-up cycles of these high complexity electronic segments,” Bernard added.
Arthur Tan, IMI Chief Executive Officer, stated “Despite the challenges we’ve faced these recent months, we remain confident that we have positioned ourselves as a key player in the electronics supercycle. Several electronics segments are undergoing major overhauls as they shift to next generation platforms. From autonomous and electric vehicle technologies, to 5G infrastructure in telecom, and to power module applications required across all segments, IMI is entrenched and ready to serve all these emerging technologies.”
Integrated Micro-Electronics Inc. (IMI), the manufacturing arm of AC Industrial Technology Holdings, Inc., a wholly-owned subsidiary of Ayala Corporation, is among the leading global manufacturing solutions expert in the world. IMI now ranks 17th in the list of top 50 EMS providers in the world by the Manufacturing Market Insider (March 2019 edition), based on 2018 revenues. In the automotive market, it is the 5th largest EMS provider in the world per New Venture Research.
IMI specializes in highly reliable and quality electronics for long product life cycle segments such as automotive, industrial electronics and more recently, the aerospace market.
From its 21 manufacturing plants across ten different countries, IMI provides engineering, manufacturing, and support and fulfillment capabilities to diverse industries globally.
For more information, visit www.global-imi.com.