Decline comes from higher expenses and depreciation for the period under review

 

SEMICONDUCTOR manufacturer UMS Integration : 558 +1.96% on Friday (Nov 8) reported a 32 per cent decline in profit to S$10.4 million for the three months ended Sep 30, from S$15.3 million in the same period a year prior.

 

Earnings per share for the quarter was S$0.0146, compared with S$0.0229 year on year.

 

The fall in profit was from higher expenses and depreciation for the period under review, including an increase in legal and professional fees due to the group&rsquo s planned secondary listing in Malaysia and the upkeep of property and machinery.

 

The group also incurred a foreign exchange loss, compared with a foreign exchange gain in the corresponding quarter a year ago, which was partially offset by a gain from the disposal of fixed assets. The foreign exchange loss was caused largely by the US dollar depreciation. 

 

The group has declared an interim dividend of S$0.01 per share, lower than the S$0.012 per share declared a year ago. It will be paid on Dec 16.

 

Revenue for the third quarter slid 9 per cent on year to S$64.9 million, from S$71.3 million. This was due to lower semiconductor sales from weaker global chip demand, as well as a decline in revenue from the &ldquo others&rdquo segment as material and tooling distribution was affected by a general business slowdown.

 

&ldquo Lower integrated system and component sales resulted in the group&rsquo s semiconductor segment&rsquo s revenue decline,&rdquo said UMS Integration.

 

On a quarter-on-quarter basis, however, revenue rose 16.1 per cent to S$56 million. The group&rsquo s semiconductor sales also jumped 19 per cent on the back of higher integrated system shipments.

 

Sales have resumed quarterly growth since the first quarter of FY2024, noted UMS Integration.

 

Revenue from the &ldquo others&rdquo segment however remained soft, slumping 30 per cent, on a quarter-on-quarter basis.

 

Commenting on the results, the group said that it managed to secure more orders from a new major customer in Malaysia, with new product introductions planned in the coming months. It also noted 

that the outlook for the semiconductor industry &ldquo appears to be promising&rdquo .   

Andy Luong, the founder and CEO of UMS Integration, has bought 600,000 shares in the company on Sept 12.

 

The shares were bought from the market for $589,500 or 98.25 cents.

 

Following the purchase, Luong&rsquo s total stake in the company increased to 15.34% from 15.25%.

 

On Aug 12, UMS Holdings 558 reported earnings of $19.5 million for the 1HFY2024 ended June 30, 35% lower y-o-y.

 

The lower earnings were due to the lower revenue of $109.9 million for the period, down 29% y-o-y.

 

UMS, on the same day, announced that it will be changing its name from UMS Holdings to UMS Integration Limited.

 

The name change is connected to the company&rsquo s proposed secondary listing on the Malaysian Bursa.

 

According to the group, the name change will &ldquo better reflect&rdquo its identity and status. It will also distinguish it from similarly named companies in Malaysia.

 

In addition, the proposed name change will cement UMS&rsquo s growing footprint in Malaysia as it expands its production facilities there. The group announced that it acquired another 5.38 acres of leasehold industrial land in Penang&rsquo s Science Park North to build its third factory on July 1.