MICRO-MECHANICS : 5DD -0.54% reported a net profit of S$2.7 million for its first quarter ended September, down 36.4 per cent from S$4.2 million in the same period last year, amid a slowing semiconductor industry.

 

This translates to earnings per share of S$0.0194 for Q1 FY2024, versus S$0.0305 in Q1 FY2023.

 

Revenue for the quarter fell 21.5 per cent year on year to S$15.9 million from S$20.2 million. 

 

On Monday (Oct 30), the group said its topline fall was generally in line with the trend of global semiconductor sales, which was lower year on year in both July and August this year.

 

&ldquo During Q1 FY2024, we continued to experience significant challenges from the sudden and sharp downturn in the semiconductor industry,&rdquo added the precision tools and parts manufacturer.

 

In tandem with the reduction in the group&rsquo s sales, Micro-Mechanics&rsquo average capacity utilisation rate for the quarter fell to 50 per cent compared to 61 per cent in the same period a year ago.

 

Gross profit margin sank to 48.8 per cent from 51 per cent in Q1 FY2023. The group said this was because of a significant decline in business activities as compared to a year prior, resulting in an under-absorption of costs, and further exacerbated by inflationary pressures.

 

Administrative expenses decreased 22.7 per cent to S$2.1 million from S$2.8 million in the year prior, which the group mainly attributed to cost control measures and reduced headcount.

 

Other operating expenses were also down 14.8 per cent to S$1.1 million from S$1.3 million in Q1 FY2023, largely due to cost-reduction measures implemented at the group&rsquo s factory in the US.

 

While Micro-Mechanics said that it &ldquo regularly exceeded&rdquo the company&rsquo s dividend policy to distribute at least 40 per cent of annual earnings, it &ldquo may now be prudent&rdquo to retain a higher amount of cash than typically held on the group&rsquo s balance sheet.

 

&ldquo Moving ahead, we will continue our strategy to grow our core businesses by maintaining a strong and unrelenting focus on the value we bring to our customers while building sustainable, competitive advantages through repeatable, scalable and cost-effective manufacturing processes,&rdquo said Chris Borch, chief executive of Micro-Mechanics.

 

MICRO-MECHANICS : 5DD +4.4% posted a 66 per cent drop in net profit to S$2 million for its fourth quarter ended June, from S$5.9 million in the previous corresponding period.

 

Revenue for the quarter fell 30.8 per cent to S$15.2 million from S$22.0 million in the previous year, according to the financials released on Monday (Aug 28).

 

The drop in profit translates into lower earnings per share (EPS), of S$0.0143 for the quarter, compared to EPS of S$0.0422 in the fourth quarter of the previous financial year.

 

The group noted that its performance reflected the cyclical slowdown in the global semiconductor industry since the second half of 2022.

 

According to World Semiconductor Trade Statistics, worldwide semiconductor sales from Jul 1, 2022 to Jun 30, 2023 totalled US$511.1 billion, down 14.8 per cent compared to US$600.2 billion in the same period a year ago.

 

Chief executive officer of Micro-Mechanics, Chris Borch, said that the group has faced significant pressure from the sharp slowdown in the global semiconductor industry as well as rising costs across the board from materials to manpower and energy.

 

A final dividend of S$0.03 per share will be paid on Nov 17. This, together with the interim dividend of S$0.06, brings the total dividend for the financial year to S$0.09. This translates to a dividend payout ratio of 128 per cent, based on the Group&rsquo s earnings per share of S$0.0703 for FY2023.

 

On the year, the group recorded a 50.7 per cent decrease in full year net profit to S$9.8 million from S$19.8 million. Its FY2023 revenue at S$67.0 million was also 18.7 per cent lower than the S$82.5 million in FY2022.

 

&ldquo Looking ahead to FY2024, we will continue our strategy to grow the group&rsquo s core businesses by focusing on the value we bring to our customers, while building sustainable, competitive advantages through repeatable, scalable and cost-effective manufacturing processes,&rdquo said Borch.

 

According to the release, Micro-Mechanics is working on implementing key initiatives to streamline labour-intensive work areas, better digitalise processes and build a stronger, more flexible team across its five factories worldwide.

 

&ldquo In the future, we believe there may only be a handful of suppliers capable of meeting the increasingly stringent manufacturing demands of the semiconductor industry.&rdquo

 

&ldquo Our aim is for each facility to master the fundamentals of excellence for stringent and complex manufacturing and become a five-star factory,&rdquo Borch noted.

MICRO-MECHANICS on Friday (Apr 28) reported a 63 per cent fall in profit for Q3 FY2023 to S$1.6 million, from S$4.4 million in Q3 FY2022.

 

Revenue for the quarter fell 24.2 per cent to S$14.9 million, from S$19.7 million the year prior. The fall in revenue reflects the cyclically slower conditions in the global semiconductor industry, the precision tools and parts manufacturer said.

 

Global semiconductor sales for January and February 2023 have shown a decline of about 20 per cent from the same period last year, according to data from World Semiconductor Trade Statistics.

 

&ldquo The cyclical downturn has resulted in challenging business conditions for companies that operate in the semiconductor industry,&rdquo said Chris Borch, chief executive officer, Micro-Mechanics.

 

The global semiconductor market is expected to slow until excesses and supply-demand imbalances ease. In addition, the business environment will remain challenging in light of economic and geopolitical concerns.

 

Borch said Micro-Mechanics will focus on the industry&rsquo s long-term fundamentals and not on short-term valuations.

 

&ldquo To that end, we intend to stay focused on various fundamentals and continue executing key progress initiatives which, in the long term, will make Micro-Mechanics a stronger competitor in the industry,&rdquo he said.

 

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 &ldquo difficult conditions&rdquo in China &ndash the group&rsquo s major market &ndash 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.

 

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.

 

&ldquo As cyclicality is typical for the semiconductor industry, we prefer to focus on the industry&rsquo s long-term fundamentals and try not to get side-tracked by short-term variations.&rdquo

MICRO-MECHANICS on Friday (Oct 28) posted a 14.6 per cent decline in net profit to S$4.2 million for its first quarter ended Sep 30 compared with S$5 million the previous year. 

 

This marked the end of four consecutive quarters of growth for the manufacturer of high-precision tools and parts for the semiconductor industry, due to a combination of slightly lower revenue, increased costs and margin declines. 

 

Group revenue for the quarter fell by 1.3 per cent to S$20.2 million, from S$20.5 million in the equivalent period the year before. 

 

The lower top-line was mainly due to a slowdown in orders in the Chinese market compared to the previous year, when customers raised their stock holdings of the company&rsquo s products amid supply chain disruptions. China nonetheless remained the largest contributor to the company&rsquo s Q1 2023 revenue.

 

Double-digit growth in sales to customers in Singapore and the US helped to partially offset this decline, with contributions from both markets growing year on year due to the acquisition of new major customers.

 

Earnings per share stood at 3.05 Singapore cents, down from 3.57 cents a year ago. 

 

 

Notably, group gross profit margin for the quarter fell by 4.5 percentage points to 51 per cent from 55.5 per cent previously, which Micro-Mechanics attributed to inflationary pressures and supply chain challenges. 

 

The group maintains that gross profit margin for Q1 FY2023 remains healthy and above its threshold of 50 per cent &ndash adding that it intends to continue its &ldquo relentless focus&rdquo on working to strengthen its gross profit margin. 

 

Looking ahead, Micro-Mechanics expects rapidly rising costs to continue putting pressure on its gross profit margin, but said it remains focused on streamlining its operations while keeping a tight rein on expenses.

 

SEMICONDUCTOR play Micro-Mechanics said in a bourse filing on Saturday (Aug 27) that it achieved its &ldquo highest-ever&rdquo quarterly results for the 3 months ended Jun 30 as net profit leapt 22.7 per cent to S$5.9 million, from S$4.8 million a year ago.

 

This came as revenue grew 14.8 per cent in the quarter to S$22 million, from S$19.1 million a year earlier, amid a 46.5 per cent jump to its US sales to S$5.6 million, and a 6.9 per cent jump to its sales in China, its largest market, to S$6.4 million.

 

Over the same period, its Singapore market registered double-digit sales growth of 33.5 per cent to S$2.6 million, the company, which manufactures high precision tools and parts used in process-critical applications for the semiconductor industry, added.

 

Earnings per share stood at 4.22 Singapore cents for the quarter, up from 3.44 Singapore cents a year ago.

 

With these, the company proposed a final dividend of 6 Singapore cents per share and special dividend of 2 Singapore cents per share, which will bring its total dividend payout for FY2022 to 14 Singapore cents per share. The dividend paid for FY2021 was also 14 Singapore cents.

 

FY2022&rsquo s dividends will be paid on Nov 18, if they are approved by shareholders at an annual general meeting which the company will hold on Oct 14, Micro-Mechanics said. The total payout will cost the company S$19.5 million.

 

For the full year, the group&rsquo s return-on-equity improved to a record 34 per cent, it noted.

 

This comes as net profit increased 9.7 per cent to S$19.8 million on the back of revenue growth of 11.8 per cent to S$82.5 million, given the double-digit sales growth seen across its 3 largest geographical markets &ndash China, US and Malaysia.

 

All in all, its sales in China grew 18 per cent to S$27.6 million in the year.

 

Pointing out that the sales growth came despite the impact of the Chinese government&rsquo s movement control measures during the second half of the financial year, the company said that China remained its largest market, contributing 33.4 per cent to the group&rsquo s revenue. 

 

Its sales in the US, which accounted for 21.4 per cent of group sales in the fiscal year, ramped up 19.4 per cent to S$17.6 million, while its sales in Malaysia, which contributed 15.4 per cent in group sales, rose 10.9 per cent to S$12.7 million. 

 

Chief executive Chris Borch attributed this performance to the group&rsquo s operational resilience amid continued growth of the global semiconductor industry.

 

&ldquo Despite facing significant challenges in the aftermath of the Covid-19 pandemic that included staff shortages, inflationary pressures, supply chain shortages and other disruptions, we managed to keep our 5 worldwide factories running and focused on meeting the needs of customers,&rdquo he said.

 

While rapidly rising costs for materials, energy and manpower had weighed on the group&rsquo s gross profit margin, he noted that the year&rsquo s margin had stayed healthy, at 53.4 per cent, compared to 54.3 per cent for FY2021.

 

Nevertheless, Borch cautioned that inflationary pressures are expected to prevail, and said the focus now is on strengthening the margin through initiatives that enhance its value to customers, improve quality and streamline the operations of its factories.

 

The group is in a strong position to capitalise on the industry&rsquo s future growth, he added, as it expects to build more chip fabrication plants in China and the USA over the next few years. 

 

There are also efforts to turn Singapore and Malaysia into hubs for semiconductor equipment manufacturing, he pointed out.

 

Net profit increased 9.7% to S$19.8 million on revenue growth of 11.8% to S$82.5 million in FY2022 

 

  Group&rsquo s return-on-equity improves to a record 34% in FY2022   

 

 Healthy financial position with cash of S$20.4 million and no bank borrowings

 

The Group also achieved its highest-ever quarterly results for the three months ended 30 June 2022 (&ldquo 4Q22&rdquo ) as net profit jumped 22.7% to S$5.9 million on revenue growth of 14.8% to S$22.0 million.

 

To reward shareholders, Micro-Mechanics has proposed a final dividend of 6 cents per share and special dividend of 2 cents per share, which will bring its total dividend payout for FY2022 to 14 cents per share.

SEMICONDUCTOR play Micro-Mechanics (Holdings) : 5DD +0.96% posted a 5.8 per cent rise in net profit to S$4.4 million for its third quarter ended Mar 31, 2022, from S$4.2 million a year ago.

 

This was driven by a stronger revenue in the quarter, which rose 11.2 per cent to S$19.7 million, from S$17.7 million a year earlier.

 

The company had registered double-digit sales in its 3 largest geographical markets in China, the US and Malaysia, amid the continuing uptrend in the global semiconductor market, it said in a bourse filing on Friday (Apr 29).

 

Earnings per share stood at 3.18 Singapore cents for the quarter, up from 3 cents a year ago.

 

No dividend was declared for the quarter, unchanged from a year ago.

 

For the 9 months ended Mar 31, net profit increased 5 per cent to S$13.9 million on the back of revenue growth of 10.8 per cent to S$60.5 million.

 

In the 9 months, the company said its sales in China &ndash its largest geographical market &ndash grew 23.1 per cent to S$21.1 million, while sales from its second largest market in the US rose 10 per cent to S$12.1 million. Meanwhile, sales from Malaysia rose 13.5 per cent to S$9.6 million.

 

Micro-Mechanics chief executive Chris Borch noted that it saw many challenges to its operations in the period, including government restrictions due to Covid-19, supply chain disruptions, rising energy costs and other economic and political concerns.

 

&ldquo Indeed, these challenges are helping us to accelerate structural changes, implement process improvements and develop innovations while strengthening our focus on key initiatives which we believe will make Micro-Mechanics an even more valuable supplier to our customers and a stronger competitor in the industry,&rdquo Borch said.