UMS Q1 net profit up 44% on sustained demand for semiconductors

PRECISION-engineering firm UMS Holdings on Monday recorded a first-quarter rise in net profit of 44 per cent to S$15.4 million, in part due to the continued acceleration of demand for semiconductors worldwide.

The mainboard-listed company also announced an interim dividend of one Singapore cent per share for the quarter ended March 31.

UMS chairman and chief executive Andy Luong said in a statement on Monday: "While the Covid-19 pandemic has given rise to challenging market conditions, it has fuelled increasing consumption of chips across a wide range of markets and applications, opening up significant growth opportunities for us, as global fabs continue to boost their production capacities and expansion plans."

Companies such as UMS which support the chip equipment sector are thus poised to benefit from this sustained semiconductor upswing, especially as the global semiconductor industry is forecast to hit record highs in fab equipment spending till 2022, he said.

UMS' first-quarter revenue was up 42 per cent year on year to S$49.6 million, largely due to the sustained demand for semiconductors. Revenue from its semiconductor segment was up 47 per cent to S$46.7 million compared with the previous year, thanks to higher integrated-system and component sales.

Sales from its other segments dipped 9 per cent to S$2.9 million due to lower revenue from its metal products and solutions provider subsidiary, Starke Singapore.

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With the exception of the United States and others, sales from other key geographical markets grew significantly in the first quarter. Malaysia was the best-performing, with sales climbing 93 per cent to S$1.5 million due to higher material distribution sales. Taiwan was up 70 per cent to S$9.2 million due to increased component spares sales; Singapore climbed 51 per cent to S$33 million because of higher shipments of semiconductor integrated-system sales and component sales for new equipment.

The group's "others" geographical segment remained relatively stable at about S$437,000, while the US revenue fell 14 per cent to S$5.4 million due to lower component sales.

UMS also benefited from a foreign-exchange gain of S$1.3 million, which was partially offset by a provision for project loss of S$700,000 related to Kalf Engineering.

Its associate company JEP Holdings contributed S$300,000 to the group's bottom line, though it was a 70 per cent decline from the previous year due to challenges faced in the aerospace industry caused by the ongoing Covid-19 pandemic.

Mr Luong said that the offer to acquire JEP Holdings serves to diversify the group's revenue streams.

"We remain optimistic about the future of the aviation sector as mass vaccinations and border re-opening efforts will increase in the coming months," he said.

Earnings per share stood at 2.88 cents for the quarter, versus 2 cents for the corresponding period in the previous year. The group net asset value per share grew to 49.8 cents in March 31, 2021, from 47.1 cents as at Dec 31, 2020.

Shares of UMS ended Monday at S$1.36, up S$0.01 or 0.7 per cent.