Publication date: 25 February 2010
Integrated Micro-Electronics Inc. (IMI), a leading electronics manufacturing services (EMS) provider to the world’s key original equipment manufacturers (OEMs) and a member of the Ayala group of companies, posted a turnaround with US$10 million in consolidated net income after tax in 2009. This is a reversal of the net loss incurred in the previous year due to a gradual increase in revenues starting in the second half of 2009 and effective cost management. Also, the year 2008 was negatively affected by non-recurring, extraordinary costs.
Arthur Tan, IMI president and chief executive officer, said that “2009 was a very challenging year for the entire electronics industry. The effects of the global economic downturn on our markets, which began in the second half of 2008 ensued in 2009. The electronics manufacturing services (EMS) sector experienced lower volume requirements of the OEMs. In addition, there was a severe supply shortage of electronics components, as suppliers were cautious of excess inventory brought about by the market’s uncertain outlook.”
With the electronics sector under difficult circumstances in 2009, IMI’s revenues for the year declined by 10 percent from 2008 to US$395.5 million. It was only in the second half of the year that the industry environment began to improve, with market trends either bottoming out or posting growth, albeit at a slower pace. IMI’s revenues rebounded accordingly which, coupled with effective cost control and operational streamlining measures, resulted in IMI achieving a net income after tax of US$10 million.
IMI’s net income after tax rose by 160 percent year-on-year due to improved sales revenues starting in the third quarter of the year, consolidation of operations in the Philippines, aggressive cost reduction measures that greatly reduced general and administrative expenses, and recovery of insurance losses.
Sherisa P. Nuesa, IMI chief finance officer and senior managing director, said “Despite severe stresses on the global electronics industry, we managed to record a respectable bottom line. With the downturn, a number of players in the EMS industry posted negative to lackluster results. Our EBITDA (earnings before interest, taxes, depreciation and amortization) remained robust. Further, we continued to maintain a solid balance sheet securing comfortable liquidity and debt levels.”
IMI’s consolidated cash balance at the end of 2009 was US$53.9M, about same level as in the previous year despite making US$22.8M in bank debt repayments. Current ratio stood better at 1.89:1 from 1.70 as at end of 2008. Debt-to-equity ratio likewise improved to 0.29:1 from 0.45 of the previous year.
IMI’s operations in China and Singapore contributed 51 percent to the total revenues in 2009. The main revenue contributor was the increase in volume for a leading Chinese OEM in telecommunications driven by the 3G network deployments in emerging markets. In the Philippines, IMI remained strong in the storage device, automotive, and consumer electronics markets.
Tan said, “With the global economy expected to improve gradually in 2010, we expect the demand for electronic products to increase even at a moderate rate. As their inventories stabilize, OEMs will be increasing their volume orders from EMS companies like IMI.”
Tan emphasized that IMI’s solid track record with its OEM customers, a global footprint, and a robust financial position will enable the company to capitalize on the uptrend in electronics. “We will gravitate toward high-growth, high-margin product niches to continue on our path of sustainable growth and profitability. We are positioning in key growth niches within the automotive, industrial, and renewable energy markets while probing into other nontraditional markets that could provide synergistic out-of-the-box business solutions,” he said.
Integrated Micro-Electronics Inc. (IMI) is a vertically integrated electronics manufacturing services (EMS) provider to leading global original equipment manufacturers (OEMs) in the computing, communications, consumer, automotive, industrial, and medical electronics markets. It has transformed its operations in the Philippines into a worldwide network that includes a subsidiary (Speedy-Tech Electronics Ltd.) with manufacturing plants and engineering centers in China and Singapore; an advanced manufacturing engineering and new product introduction center in the United States; and sales offices in Japan, China, Singapore, the United States and Germany. IMI’s capabilities allow it to take on the specific outsourcing needs of its customers, providing them with flexible solutions that encompass design, manufacturing, and order fulfillment. IMI ranks 27th in the list of top 50 EMS companies of Manufacturing Market Insider. It is also a recipient of the 2007 Service Excellence Award for highest overall customer rating from Circuits Assembly.
