UMS Q3 net profit tumbles 64% to S$15.3 million on global semiconductor demand slowdown

SEMICONDUCTOR company UMS Holdings on Friday (Nov 10) reported a 64 per cent drop in net profit for the third quarter ended September, amid a slowdown in global semiconductor demand.

Net profit fell to S$15.3 million in Q3 FY2023, from S$42.5 million in the corresponding year-ago period.

In a bourse filing, the group attributed the lower bottom line figures to softer sales, smaller foreign exchange gains, higher expenses, as well as an increase in income tax due to the reversal of tax provisions for one of its Malaysian subsidiaries in Q3 FY2022.

Revenue fell 29 per cent on year to S$71.3 million in Q3 FY2023, from S$100.1 million in Q3 FY2022.

The weaker performance was due to lower sales from both its semiconductor and “others” business segments, the group said. Revenue in its “others” segment slipped, as the material and tooling distribution business was affected by the general business slowdown.

However, these numbers were partially lifted by better performance from UMS’ aerospace segment, due to the sustained recovery of the global aerospace industry, it added.

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Earnings per share (EPS) stood at 2.29 Singapore cents for the quarter, as compared to 6.35 cents in Q3 FY2022.

An interim dividend of 1.2 Singapore cents per share was declared, up from one cent a year ago. Payment of the dividend will be made on Dec 15.

For the nine months ended September, net profit fell 46 per cent to S$44.3 million, down from S$82 million a year ago. Revenue came in 17 per cent lower at S$226.4 million, compared to S$271.4 million a year ago.

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EPS likewise declined to 6.61 Singapore cents in the nine-month period, from 12.29 cents a year ago.

Andy Luong, UMS’ chairman and chief executive officer, said: “While global chip demand remains soft and macroeconomic challenges persist, there are now signs of an industry rebound.”

He added that the group’s performance in the coming months will be supported by the “sanguine guidance of some major semiconductor equipment makers which expect to deliver sustainable outperformance, going forward”. Luong also noted “tremendous growth vectors ahead”, adding that the group will be investing strategically to drive long-term outperformance.

Barring any unforeseen circumstances, UMS said it expects to remain profitable for FY2023.

Shares of UMS closed at S$1.29 on Friday, down S$0.01 or 0.8 per cent, before the results release.