AEM Holdings posts 4% fall in Q3 net profit

MAINBOARD-LISTED AEM Holdings AWX posted a 4.3 per cent fall in net profit to S$23.3 million for its third quarter ended Sep 30, from S$24.3 million a year ago.

Revenue fell by 9.7 per cent to S$146.2 million in the same period, from S$161.8 million the year before.

Still, the electronics services provider reported higher sequential quarter-on-quarter revenue in Q3 FY2021 of S$146.2 million, from S$112 million on the back of ramped-up volume for their next-generation system level testing handlers and peripheral tools. The group expects demand to continue rising in the next few quarters.

For the 9 months ended Sep 30, the company also reported a 33.4 per cent fall in net profit year on year to S$53 million.

Revenue fell by 22.3 per cent to S$338.5 million in the same period. AEM attributed the decline to its key customer preparing to make a transition to its next-generation test platform in the first half of this year.

As demand for semiconductor chips grows, coupled with increased adoption of advanced heterogenous packaging, the group foresees that demand for its system level testing (SLT) will rise as well.

AEM said that it has engaged with 10 out of the top 20 semiconductor companies, and has started receiving initial orders, with meaningful revenue contribution from such engagement potentially beginning in the second half of 2022 and beyond.

As chipmakers like Intel, TSMC and Samsung announce new fabs, the company also expects back-end service providers like itself to have potential for expansion in the future, since front-end investments typically lead back-end investments by several quarters.

While global supply chain challenges persist, AEM noted that it may experience some shipping delays down the road, though it does not currently expect any.

AEM shares closed down 0.5 per cent or S$0.02 to close at S$4.19 on Wednesday (Nov 10), before the business update was released.