IMI net income slides to $28.8 million

Integrated Micro-Electronics, Inc. (IMI), the semiconductor manufacturing arm of the Ayala group, reported a one percent dip in net income to $28.8 million (or 1.3 billion) last year from $29.1 million in 2014.

In a disclosure to the Philippine Stock Exchange, the firm said the almost flat earnings was achieved despite volatility in the foreign currency markets and weakness in China’s economy.

“Against the backdrop of a challenging global marketplace, we expanded operating margin by 114 basis points and generated $49.8 million of cash flow from operations by focusing on high- margin auto and industrial segments and continued productivity improvements,” said IMI president Arthur Tan.

IMI’s consolidated revenues went down by four percent to $814.4 million (or 37 billion) last year due mainly to a weak euro and the downturn in the computing and telecommunications segments.

Excluding the impact of changes in currency exchange, automotive revenues climbed by 21 percent during the year and total revenues by two percent.

The revenue headwinds were offset by IMI’s strong volume growth in the automotive segment. In particular, its advanced driver assistance systems or ADAS programs (such as automotive camera programs) posted a 66 percent increase in revenues in 2015.

IMI’s China operations recorded $279.3 million in revenues in 2015, a 14 percent decline from the previous year as the 4G telecommunications network rollout in China reaches its projected volume and the consumer electronics segment experiences a slowdown.

The firm’s Europe and Mexico operations recorded combined revenues of $267.4 million, flat from last year.

The persistent weakness in the euro resulted in a three percent revenue decline for IMI’s Bulgaria and Czech Republic factories.

In Mexico, IMI revenues increased by nine percent due to higher demand for plastic injection and assembly. Overall revenues for IMI’s Europe and Mexico plants would have increased by 15 percent if not for the weak euro.

IMI’s electronics manufacturing services operations in the Philippines posted $ 225.3 million in revenues, a 10 percent growth from $204.9 million in 2014 due to a strong demand for automotive cameras and security and access control devices.

“We maintained profitability as we continue to make advances on the initiatives we started some five years ago – focus on high-margin segments, full integration of acquisitions, rationalization of costs, expansion of global footprint, and development of human capital and equipment,” Tan said.

He added that “these strategic activities have increased our new business pipeline. We had 207 program wins in 2015, up from 155 in 2014. Moving forward, we will continue to expand in Bulgaria, Mexico, and Philippines as our automotive business grows, and we will intensify our play in industrial and other growing segments.”