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AEM raises revenue guidance for FY20 on sales order visibility, business outlook

MAINBOARD-LISTED AEM Holdings has raised its FY2020 revenue guidance to between S$500 million and S$520 million based on sales order visibility and business outlook.

This comes as the group announced a near doubling of revenue year on year for the fiscal third quarter ended Sept 30. AEM, which provides advanced chip-testing solutions, previously announced on Sept 10 an upward revision to its revenue guidance to be between S$480 million and S$500 million for FY 2020.

In its Q3 business performance update released on Tuesday evening, AEM said revenue for the quarter rose 93 per cent year on year to S$161.8 million on the back of increased orders for tools, consumables, and services. Total revenue for the nine months ended Sept 30 rose to S$435.5 million, an increase of 85.7 per cent over the same period in 2019.

Net profit jumped 77.4 per cent for the quarter, rising to S$24.3 million. For the nine months, net profit more than doubled, soaring 121 per cent to S$79.6 million.

Earnings per share for the quarter jumped 76.5 per cent to nine Singapore cents, up from 5.1 cents in the year-ago period.

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Revenue growth came from both AEM's tools and machines, and consumables and services segments, with an increased share coming from the tools and machines business. The unit accounted for a 60 per cent share of revenue for the nine months ended Sept 30, up from 47 per cent in the same period a year ago. AEM's consumables and services business accounted for the remaining 40 per cent share of revenue, lower than the 53 per cent share previously.

The group said it will continue to expand strategically through mergers and acquisitions to solidify its position as a global leader offering application-specific intelligent system test and handling solutions for semiconductor and electronics companies serving advanced computing, 5G and AI markets.

AEM said it had acquired two companies, Mu-TEST and DB Design, in 2020. "Together with the three other acquisitions that the group made since 2017, AEM has brought together the core technologies to realise its SLT+ vision," it said in its update.

Capital expenditure for FY2020 is projected at about S$5 million, an increase from the approximately S$4 million previously stated in September's revenue guidance announcement. AEM said it will continue to focus more effort on research and development (R&D) and expects R&D expenditure to be S$2 million in Q4 2020 to support new projects for future years.

AEM shares were trading at S$3.53 as at the midday break on Wednesday, up S$0.09 or 2.6 per cent.

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