Integrated Micro-Electronics, Inc (IMI) Reports First Half Results
1st Half Hampered by Plant Shutdowns due to Pandemic
Laguna, Philippines — Integrated Micro-Electronics, Inc. (IMI) booked US$476 million of first half revenue in 2020 as plant shutdowns in various operating regions significantly affected financial results. Facilities in the Philippines, China, and Mexico all adhered to government mandated lockdowns to contain the spread of COVID-19. The global situation led to a 25% year-on-year reduction in top line sales while margins are likewise challenged with gross profit at US$30.5 million equating to a 6.4% margin. Reduction of overhead costs by approximately US$10 million through streamlining initiatives and government incentives helped mitigate the effects of the extended market softness. The addition of one-time inventory provisions totaling around US$3 million increased the total net loss to US$21.5 million in the first half of this year.
Arthur Tan, IMI’s president and chief executive officer, said “IMI has endured through several major crises in our 40-year history. Our battle-hardened organization has built IMI for long-term success. Challenging market environments bring opportunity to those who come prepared. IMI’s flexibility and expertise in providing the best quality technology solutions will allow us to emerge stronger than we were before.”
IMI’s wholly owned businesses declined to US$367 million of revenues, a 28% slide from last year. While some operating regions faced mandatory lockdowns, operating sites in Bulgaria and Czech Republic aligned with the demand slowdown of OEM customers by exercising voluntary reduced work schedules. As the automotive market outlook remains weak in the short term, IMI’s wide product portfolio has captured the increased demand from the consumer, industrial, medical, and telecom sectors.
Via Optronics and STI, Ltd. booked combined revenues of US$109 million for the period. In time for the uptick in global laptop demand, Via’s LCD supply chain issues were resolved in the second quarter, helping the subsidiary rebound with a 47% quarter-on-quarter improvement in top line sales. STI, on the other hand, faced continued demand slowdown as government pandemic response programs are prioritized over aerospace and defense projects.
“IMI expects a steady improvement in the second half of the year as revised customer forecasts indicate a better recovery than initially expected. The project pipeline continues to be active with US$175 million of new business wins despite the business constraints brought about by the pandemic,” Tan added.
The company now ranks 6th among the top automotive EMS providers in the world based on 2019 automotive EMS revenues per electronics market research firm New Venture Research. IMI’s ranking went down to 6th from 5th last year, based on 2018 revenues. However, growth rate is higher than the average of the top 50 in the automotive sector at 8.7 percent.