Micro-Mechanics Q2 net profit falls 58% to S$1.9 million amid global chip market slowdown
Paige Lim
SEMICONDUCTOR play Micro-Mechanics (Holdings) posted a 58.4 per cent fall in net profit to S$1.9 million for its second quarter ended Dec 31, 2022, from S$4.6 million a year ago.
Revenue for Q2 dropped 17.9 per cent to S$16.7 million, from S$20.4 million in the same period last year.
The drop in sales was due to the slowdown in the global semiconductor industry, as well as “difficult conditions” in China – the group’s major market – where a spike in Covid-19 infections has triggered new curbs and targeted lockdowns to control the outbreaks, Micro-Mechanics said in a bourse filing on Monday (Jan 30).
The group manufactures high precision tools and parts used in the semiconductor industry.
For the first half ended Dec 31, net profit was S$6.1 million, down 35.5 per cent from S$9.5 million a year ago. Revenue was down 9.6 per cent to S$36.9 million, from S$40.8 million a year ago.
Earnings per share (EPS) for Q2 stood at 1.36 Singapore cents, down from 3.28 cents a year ago. EPS for the first half fell to 4.42 cents, from 6.85 cents a year earlier.
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An interim dividend of six cents per share was declared for the half year, unchanged from a year ago. The dividend will be paid out on Feb 17, after the record date of Feb 7.
Chris Borch, chief executive of Micro-Mechanics, noted that the group began to see slower market conditions for semiconductors amid softening demand and higher chip inventories at the start of its financial year. This was especially so for personal computers and smart phone applications, which make up a major portion of chip consumption, he said.
“As cyclicality is typical for the semiconductor industry, we prefer to focus on the industry’s long-term fundamentals and try not to get side-tracked by short-term variations.”
Shares of Micro-Mechanics closed at S$2.57 on Monday, up S$0.01 or 0.4 per cent, before the release of the results.
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