UMS Holdings has reported record revenue and profits for its 9MFY2022 ended 30 Sept at $271.4 million, marking the highest 9MFY2022 revenue the company has recorded since inception.
This revenue figure beat the revenue achieved for the whole of FY2021 and compared to 9MFY2021, revenue for 9MFY2022 rose 48% to $271.4 million from $184 million.
This is due to all of its business segments reporting much stronger results, UMS said.
The semiconductor segment's sales increased by 45%, boosted by the strong performances of its semiconductor integrated system sales.
Sales in its so-called "Others" business leapt by 70%, and revenue in its aerospace section surged by 79%.
In conjunction with the increased revenue, UMS recorded record 9MFY2022 earnings of $82 million, a 73% gain y-o-y and surpassing the entirety of FY2021’s earnings of $53.1 million.
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This was driven by strong sales, improved contributions from its “other credits” segment, as well as the reversal of the tax provision made by its Malaysian subsidiary after the resolution of the pioneer tax incentives with the Malaysian government.
Other credits went up from $3.6 million in 9MFY2021 to $4.5 million in 9MFY2021, due to the absence of a one-time debt waiver and higher forex gain from the US dollar appreciation.
The record performance was achieved despite a slightly lower gross material margin of 51.2% compared to 53.1% in 9MFY2021, as well as higher expenses.
Personnel costs rose 32% while depreciation and other expenses also increased 39% and 30% respectively.
On a quarterly basis, UMS’s 3QFY2022 revenue jumped 48% to a new high of $100.1 million from $67.6 million in 3QFY2021, while earnings more than doubled to $44.4 million from $15.1 million in 3QFY2021.
Geographical performance
All of UMS’s key markets reported higher revenue growth in 3QFY2022, although Malaysia most notably delivered a 104% surge in sales to $5.8 million - due mainly to the commencement of first article fabrication for a new customer.
Singapore also registered strong sales growth of 54% to hit $72.4 million, on the back of higher integrated system sales and component sales for new equipment.
Meanwhile, in Taiwan, higher component spares sales also lifted 3QFY2022 sales on the island by 53% to almost $9 million.
However, US sales stayed relatively flat, up only 4% in 3QFY2022 compared to 3QFY2021.
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Commenting on the results, UMS CEO Andy Luong says the results are “another testimony of our operational resilience, manufacturing excellence and the success of our efforts to expand our top line.”
“This was through new customer acquisitions, increased orders from existing customers as well as strategic diversification into the aerospace sector,” he added.
Moving forward, the company acknowledges that near-term challenges remain, such as the US-China tech rivalry, rising inflation and supply chain disruption caused by geopolitical tensions such as the Russia-Ukraine crisis.
Despite this, UMS expects global chip demand is expected to stay fairly strong in the longer term, noting that semiconductor manufacturers worldwide are forecast to expand 300mm fab capacity at a nearly 10% compounded average growth rate (CAGR) from 2022 to 2025, hitting an all-time high of 9.2 million wafers per month.
Separately, UMS also highlights that the aerospace industry is also looking up. While the current recovery is still impacted, global leaders such as Boeing forecast a market value of $7.2 trillion for new aeroplane deliveries, with the global fleet increasing by 80% through 2041 compared to 2019 pre-pandemic levels.
UMS also says its expansion plans are progressing well. Construction of the new Penang factory is on schedule for completion by end of the year and the Group is preparing to ramp up production from the middle of 2023.
Luong also says that in view of “our all-time high performance, we will continue to reward our shareholders with a [third] interim dividend of one cent per share."
Shares of UMS closed on Nov 11 at $1.07, 9.5 cents higher or 9.74% up from its previous close.
