SINGAPORE (Aug 14): UMS Holdings saw its earnings drop 44% to $8.1 million for the 2Q19 ended June, from $14.5 million a year ago.
Earnings per share fell to 1.51 cents in 2Q19, compared to 2.70 cents in 2Q18.
2Q19 revenue fell 15% to $30.0 million, from $35.2 million a year ago, as US-China trade tensions, plunging memory prices and the shift in chipmakers' strategies continued to weigh on the group's performance.
The decline was led by a 25% drop in sales from its semiconductor segment, due to lower semiconductor integrated system sales which fell 19% to $11.9 million and a 30% drop in component sales to $14.5 million.
During the quarter, the group had made efforts to trim expenses.
Personnel costs were reduced by 10% due to lower overtime costs and decreased bonus provisions. Other expenses were cut by 20% in line with lower production volume, while income tax expense was slashed by 51% in line with reduced profits.
As at end June, cash and cash equivalents stood at $60.7 million.
The board has proposed an interim dividend of 0.5 cent per share for 1H19, to be paid on Oct 25. This is half of the interim dividend of 1.0 cent per share declared last year.
“While the second half outlook for the semiconductor business remains challenging, we are currently seeing stable business order volumes from our major customer in the US,” says Andy Luong, UMS' executive chairman and CEO.
Going forward, the group says it will intensify its collaboration with its associate company JEP Holdings, of which the UMS recently increased its stake to 39%.
“JEP… has improved its profitability steadily,” Luong says. “As JEP’s operational efficiency improves, its team has stepped up its engagement with aerospace OEM customers and is making promising progress.”
Shares in UMS closed half a cent higher at 58.5 cents on Wednesday before the results announcement.
