UMS Q4 net profit hits S$16.1 million; final dividend of S$0.02 proposed

SEMICONDUCTOR company UMS Holdings posted a net profit of S$16.1 million for the fourth fiscal quarter ended December last year, up from S$5.7 million in the corresponding 2021 period. 

Revenue for the quarter was up 16 per cent to S$101 million, from S$87.3 million on the back of improved performance across all business segments, the company said in a filing to the Singapore Exchange on Tuesday (Feb 28). 

For the full year, the company’s earnings rose to a record high of S$98.2 million from S$53.1 million. Revenue advanced 37 per cent to S$372.4 million from S$271.2 million. 

The board of directors at UMS has proposed a final dividend of S$0.02 per share, unchanged from the final dividend for 2021. The proposed final dividend, if approved by shareholders at the upcoming annual general meeting, will be paid out on May 22. 

UMS attributed the stronger performance in 2022 primarily to higher sales, as well as a reversal of the tax provision made by its Malaysian subsidiary after the resolution of its pioneer tax incentives with the Malaysian government. 

The group, however, suffered from the likes of a lower gross material margin, higher expenses and foreign exchange loss due to the currency depreciation of the US dollar. 

Gross material margin in FY2022 fell to 49.9 per cent from 52.8 per cent in FY2021 on the back of the US dollar depreciation, higher material costs as well as lower margins from Kalf Engineering’s sales. 

In terms of sales for the fourth quarter, semiconductor sales rose 9 per cent to S$84.7 million, while integrated system sales rose 50 per cent to S$46.1 million. 

This was partially offset by lower sales from the group’s component business, where revenue fell 18 per cent to S$38.5 million on the back of the business slowdown over at some backend semiconductor customers. 

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Geographically, Singapore registered sales growth of 11 per cent to S$69.2 million on the back of higher integrated system sales and component sales for new equipment. Revenue from Thailand rose 72 per cent, while contributions from the US market rose 14 per cent. 

Meanwhile, Malaysia reported a sales dip of about 8 per cent. 

UMS chief executive Andy Luong said: “Looking ahead, the outlook for UMS in next six months will be softer; global chip demand is expected to ease in the near term as customers turn more cautious in the face of an economic slowdown, rising inflation and ongoing geopolitical tensions.”

The company said its order book remains healthy, and the group will continue to expand capacity to meet customer demands.

Barring unforeseen circumstances, the group expects that it will remain profitable in 2023.

Shares of UMS fell 2.7 per cent or S$0.03 on Tuesday to close at S$1.08.