UMS H1 earnings up 23% on growing global semiconductor demand

Semiconductor company UMS Holdings reported record-breaking earnings and revenues for its fiscal second quarter and first half of the year ended June 30, 2022, which it attributed on Friday to “solid semiconductor demand worldwide and favourable tailwinds in the recovering aerospace sector”.

UMS’s net profit rose 19 per cent to S$20.2 million for Q2 FY2022, from S$16.9 million the year before. For the first half of the year, its net profit grew 23 per cent to S$39.5 million.

Its revenues for the second quarter increased 30 per cent year on year to S$86.6 million, from S$66.8 million. For the first 6 months of the year, revenues rose 47 per cent to S$171.3 million, the highest half-year sales the company has ever reported.

The group said revenue growth was mainly driven by sustained global semiconductor demand and the consolidation of the full 3 months of results from JEP Holdings — a recent acquisition — compared to just 2 months being recorded for the year before.

“Our JEP acquisition not only gave us a shot in the arm by boosting our ability to ramp up production despite a tight labour situation in Malaysia but also lifted our top and bottom lines,” said UMS’ chairman and chief executive Andy Luong.

UMS said that all of its core business segments — semiconductors, aerospace and others comprising water-treatment solutions and trading of non-ferrous metal alloys and cutting tools — continued to report sterling results.

All its key geographical markets grew in Q2, UMS said. Except for the United States — where sales increased 2 per cent — all of its markets turned in a double-digit sales surge. Malaysia and Taiwan were its “star performers”, with revenue climbing 72 per cent and 70 per cent, respectively. Singapore sales grew 27 per cent on the back of higher integrated-system sales and component sales, as well as from the consolidation of JEP’s semicon component business.

UMS reported earnings per share (EPS) of 3.03 Singapore cents in Q2, up from 2.54 cents. For H1, its EPS rose to 5.93 cents from 4.84 cents.

The company declared an interim, one-tier dividend of 1 cent per share for the period just ended — equivalent to last year’s.

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UMS said its order forecasts remain strong as global sales of total semiconductor manufacturing equipment by original equipment manufacturers are expected to continue growing, although it also acknowledged near-term challenges such as supply disruptions and rising inflation.

It is also expecting the aviation sector to continue improving, based on industry reports.

Barring any unforeseen circumstances, UMS said it expects to stay profitable for the year ahead.