IMI posts lower profit amid challenges
INTEGRATED Micro-Electronics, Inc. (IMI) booked a smaller profit in 2016 despite growing its operating revenues and margins amid a “challenging” environment for electronics manufacturing.
The Ayala-led electronics manufacturing services provider on Thursday said transactions costs related to acquisitions along with fluctuations in the renminbi dragged its net income to $28.1 million, or P1.3 billion.
The listed company’s bottom line settled nearly 2.5% below the $28.79 million of earnings attributed to the parent in 2015.
Aside from the inflated costs and foreign exchange losses, IMI saw its operations both within and outside the Philippines slow down in 2016. Its consolidated revenues only grew 4% to $843 million from $816.24 million.
Without taking into account the impact of acquisitions, the company’s revenues rose 1% higher on the back of the European and Mexican operations that raked in 15% more revenues or $308 million in aggregate.
Weaker economic activity and the disengagement of IMI from a consumer electronics business capped the growth of operations in Asia. The declining segment in computing peripherals, meanwhile, restrained the Philippine business.
The operations in China turned in $261.4 million, a 6% decrease from a year earlier, while the electronics services in the Philippines delivered $221 million or 2% lower. Semiconductor assembly and test subsidiary PSi Technologies also posted a 2% fall in revenues to $33 million.
IMI, however, managed to improve its gross profit margin and push its operating revenues 13% higher during the period.
“Despite challenges in the global economic environment and the ongoing portfolio mix changes from our Asian operations, we were able to accomplish a positive growth and improved gross profit margin by 50 basis points to 12%,” IMI President and Chief Operating Officer Giles Bernard noted.
IMI specializes in durable electronics for long-product life cycle segments such as automotive and industrial electronics.
For the automotive sector, the company provides customized solutions for safety and security, such as cameras for advanced driver assistance systems. For the industrial segment, it makes security and access control devices, power modules and building automation, among others.
In 2016, the company spent $52.3 million on capital expenditures to expand its presence in more complex and higher value-added manufacturing.
As part of efforts to sustain and accelerate its growth, the company acquired the controlling stake in Germany’s leading optical bonding and display solutions provider VIA optronics GmBH for €;47.7 million in September.
IMI also forged in May a value-added reseller partnership with Macnica Europe GmbH, a provider of technical services and high-value products that include semiconductor components, electronic devices, network equipment and software to electronic manufacturers.
“The company’s robust presence in the automotive and industrial segments equipped IMI to seize many opportunities ahead. We won new projects in 2016, mostly from those segments, a 23% growth from the previous year,” IMI Chief Executive Officer Arthur R. Tan said.
Shares in IMI closed 40 centavos or 6.36% higher at P6.69 apiece on the Philippine Stock Exchange on Thursday, tracking a market-wide rebound from a two-day descent. -- Keith Richard D. Mariano