Micro-Mechanics posts 66% fall in Q4 profit to S$2 million
Mia Pei
MICRO-MECHANICS posted a 66 per cent drop in net profit to S$2 million for its fourth quarter ended June, from S$5.9 million in the previous corresponding period.
Revenue for the quarter fell 30.8 per cent to S$15.2 million from S$22.0 million in the previous year, according to the financials released on Monday (Aug 28).
The drop in profit translates into lower earnings per share (EPS), of S$0.0143 for the quarter, compared to EPS of S$0.0422 in the fourth quarter of the previous financial year.
The group noted that its performance reflected the cyclical slowdown in the global semiconductor industry since the second half of 2022.
According to World Semiconductor Trade Statistics, worldwide semiconductor sales from Jul 1, 2022 to Jun 30, 2023 totalled US$511.1 billion, down 14.8 per cent compared to US$600.2 billion in the same period a year ago.
Chief executive officer of Micro-Mechanics, Chris Borch, said that the group has faced significant pressure from the sharp slowdown in the global semiconductor industry as well as rising costs across the board from materials to manpower and energy.
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A final dividend of S$0.03 per share will be paid on Nov 17. This, together with the interim dividend of S$0.06, brings the total dividend for the financial year to S$0.09. This translates to a dividend payout ratio of 128 per cent, based on the Group’s earnings per share of S$0.0703 for FY2023.
On the year, the group recorded a 50.7 per cent decrease in full year net profit to S$9.8 million from S$19.8 million. Its FY2023 revenue at S$67.0 million was also 18.7 per cent lower than the S$82.5 million in FY2022.
“Looking ahead to FY2024, we will continue our strategy to grow the group’s core businesses by focusing on the value we bring to our customers, while building sustainable, competitive advantages through repeatable, scalable and cost-effective manufacturing processes,” said Borch.
According to the release, Micro-Mechanics is working on implementing key initiatives to streamline labour-intensive work areas, better digitalise processes and build a stronger, more flexible team across its five factories worldwide.
“In the future, we believe there may only be a handful of suppliers capable of meeting the increasingly stringent manufacturing demands of the semiconductor industry.”
“Our aim is for each facility to master the fundamentals of excellence for stringent and complex manufacturing and become a five-star factory,” Borch noted.
Shares of Micro-Mechanics were trading flat at S$1.82 as at 1.57 pm on Monday.
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