UMS reports 17% drop in FY18 earnings of $43 mil on lower sales

UMS reports 17% drop in FY18 earnings of $43 mil on lower sales

PC Lee
26/02/19, 04:52 pm

SINGAPORE (Feb 26): UMS Holdings, the precision engineering group which specialises in the manufacture of semiconductor components, reported 4Q18 earnings of $9.3 million, down 41% from a year ago.

Revenue in 4Q18 declined 33% to $25.9 million due mainly to a 36% decline in the semiconductor segment which was offset by a 63% rise in sales surge from its others segment comprising mainly revenue from subsidiaries Starke Singapore and Kalf Engineering.

Sales from semiconductor integrated systems dropped 57% for the quarter to $7.8 million from $18.2 million in 4Q17. Revenue from component sales also dipped by 16% to $16.2 million in 4Q18.

Gross material margin, however, edged up to 60.9% from 58.3% for the year-ago quarter due to the group's product mix, with more higher-margin component sales.

The group benefitted from a bargain purchase gain of $1.6 million from its 70% stake in Starke Singapore. Also, it continued to benefit from contributions from its associate JEP Holdings which saw significant improvement in its profitability in the second half of FY18.

The group took steps to reduce its costs. Personnel costs eased mainly due to lower bonuses while other expenses dipped 8% over last year; legal and professional fees fell 38%, rental expense were 46% lower due to the consolidation of US operations into the Milpitas facility. Foreign exchange losses were lower by half to $0.4 million. Its income tax for the period was lower too.

For FY2018 UMS posted earnings of $43.1 million, a 17% dip from a year ago. Revenue for the full year came in at $127.9 million, down 21%.

UMS says the near-term outlook continues to be challenging due to much uncertainty in the order flows of customers due in part to the ongoing China-US trade tensions which affected demand from semiconductor chipmakers.

UMS has proposed final dividend of 2 cents.

However, the longer term outlook remains upbeat with SEMI, the global industry association representing the electronics manufacturing supply chain, reporting that even though worldwide sales of new semiconductor manufacturing equipment are projected to contract slightly by 4% in 2019, it will grow 20.7% to reach US$71.9 billion, an all-time high in 2020.

Andy Luong, UMS’s executive chairman and CEO, says, :Our FY2018 results demonstrate our resilience in the face of significant market challenges. We managed to improve our profit margins by boosting our product mix while our diversification strategy into new sectors has enabled us to reap positive returns. Our subsidiary Starke Singapore has reported a profitable performance, and our associate JEP Holdings has done well and made much improved contributions to the group.”

Shares in UMS closed at 2.5 cents higher at 74 cents on Tuesday.

Next stop: The interchange of public and private good

SINGAPORE (May 20): Two-minute intervals between trains. Fewer breakdowns. Clean, new buses running at a higher frequency. Bright LED screens displaying details of stops on both buses and trains. To many commuters who are enjoying these benefits, the meltdown of Singapore’s transport system in December 2011, and again in July 2015, is a distant memory. Certainly, services have improved significantly. There are new trains and buses, while existing ones have been spiffed up. There has been an overhaul of the older rail systems, presumably including fixing the grips for the electricity rail ....
Moving from compliance to accountability

While the collection, use and disclosure of data is regulated by the Personal Data Protection Act, b

Failed Innopac deal portends mining magnate Gutnick’s woes in Australia

SINGAPORE (May 20): The Australian Securities and Investments Commission (ASIC) is seeking judicial permission to wind down mining company Merlin Diamonds. The regulator is also probing into whether its chairman Joseph Gutnick failed in his duties. Gutnick, who is known as “Diamond Joe”, is under investigation for a A$13 million ($12.3 million) loan made by Merlin to AXIS Consultants, a private company linked to him. Merlin shares have been suspended from trading since October 2018. ASIC is seeking an order to appoint Deloitte to liquidate Merlin, owner of the Merlin Diamond Mine Pro....