AEM’s H1 earnings plunge 76% to S$19.7 million amid semiconductor industry slowdown

SEMICONDUCTOR equipment maker AEM Holdings on Friday (Aug 11) reported net profit of S$19.7 million for the first half of its 2023 financial year, a 76 per cent drop from S$82.8 million a year prior. 

This comes on the back of the group’s H1 revenue almost halving to S$275.2 million, from S$540.5 million in the year-ago period.

Earnings per share slipped to S$0.0637 for the half year, from S$0.2678 for H1 FY2022.

No dividend was declared for the period under review, as a “prudent measure to preserve cash for working capital requirement”, said the group. 

In a bourse filing, AEM attributed the steep declines to a slowdown in the semiconductor industry, where there is a surplus of inventory. This has resulted in “low test equipment utilisation and constrained test equipment capital expenditure budgets at the leading device manufacturers,” it said. 

The group noted that industry players have looked to weather this period of “inventory digestion” by delaying device releases; reducing capital expenditure spending; and renewing their focus on operational efficiency. 

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“While the inventory digestion is expected to continue through 2023, the group believes it is well-positioned to take advantage of the semiconductor volume growth that is expected to return to (the industry) in 2024,” said AEM. 

Shares of AEM closed at S$3.42 on Friday, down 0.9 per cent or S$0.03, before the earnings report.