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Micro-Mechanics net profit down 20% in Q2 amid global semiconductor slowdown

AMID moderation in the global semiconductor industry, Micro-Mechanics (Holdings) posted a 20 per cent fall in net profit to S$3.1 million in the second quarter ended Dec 31, 2018, down from S$3.9 million in the year-ago period.

This was on the back of a 3.1 per cent fall in revenue to S$15.2 million, compared to S$15.6 million in the year-ago period.

Earnings per share for the quarter were 2.25 Singapore cents, compared to 2.81 Singapore cents in the year-ago period. Micro-Mechanics will pay an interim dividend of four Singapore cents per share on Feb 18, the same amount as was paid out in the year-ago period.

The latest results brought first-half net profit to S$7.6 million, down 15.9 per cent from S$9.1 million in the first half of the preceding financial year. First-half revenue was S$32 million, down 3.9 per cent from the record S$33.3 million in the year-ago period.

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Despite slowing market conditions, Micro-Mechanics highlighted that its gross profit margin was "relatively firm" at 56.1 per cent in 1H 2019 compared to 58.7 per cent in H1 2018.

"Because cyclical conditions are typical for the semiconductor industry, particularly for wafer fabrication equipment, we prefer to focus on the industry’s long-term trends and try not to get side-tracked by short-term variations," said the firm. It noted that in the previous financial year, it invested S$10.6 million on new equipment to improve productivity.

Micro-Mechanics shares closed down one Singapore cent or 0.59 per cent at S$1.69 on Friday.