SINGAPORE (May 15): UMS Holdings reported 1Q19 earnings fell 38% to $7.0 million from $11.4 million in 1Q18.
This came on the back of a 24% declined in revenue to $28.6 million from $37.5 million a year ago, due to a 27% y-o-y drop in the group’s semiconductor business to $27.0 million.
Within the semiconductor segment, revenue from its integrated systems business decline 32% y-o-y to $12.5 million, while revenue from component sales fell by 22% y-o-y to $14.5 million.
The semiconductor equipment industry faced weak near term demands brought about by lower memory prices and a decline in capital expenditures caused by a shift in chipmakers’ strategies in response to global trade tensions. These trends exerted downward pressure on the Group’s revenues in 1Q19 in all geographical markets.
The overall increase in revenue was offset by a 223% y-o-y increase in the group’s other business segment, with revenue contributed by Kalf Engineering’s projects and Starke Singapore’s material distribution business.
During the quarter, the group recorded a loss of $6.6 million from changes in inventories, compared to a $0.7 million gain in the same period last year.
Raw material purchases and subcontractor charges dropped 59% to $6.8 million from $16.7 million last year.
As at end March, the group’s cash and cash equivalents stood at $28.4 million.
And Luong, chairman and CEO of UMS says, “We have worked hard to achieve positive results for our shareholders. We are pleased that our order books had remained stable and together with our key customer, we are making concerted efforts to navigate the current market dynamics to stay ahead of the competition."
"Our diversification strategy has also reaped positive returns for us. Our associate JEP has turned around its fortunes and made improved contributions to the Group. Going forward, we expect to further benefit from the continued growth of our associate and subsidiary companies," adds Luong.
Shares in UMS closed at 64 cents on Wednesday.
