Micro-Mechanics (5DD) H2 2024 earnings summary

Executive summary

• FY2024 revenue was S$57.9m, down 13.6% year-over-year, with sales recovery in China and Taiwan despite a global semiconductor downcycle and US WFE sector slowdown.

• Net profit fell 17.7% to S$8.0m, with net margin at 13.9% and EPS at 5.78 cents.

• Maintained strong financial position: S$16.6m cash, no bank borrowings, and S$46.1m equity.

• Focused on operational excellence, cost optimization, and leadership rejuvenation, including US subsidiary restructuring and 'Five-Star Factory' initiative.

• Received Silver Award for Best Managed Board and ranked 22nd in Singapore Governance and Transparency Index 2024.

Financial highlights

• Group revenue for FY2024 was S$57.9m (down 13.6%); Q4 revenue S$14.9m (down 1.8% YoY, up 9.7% QoQ).

• Gross profit margin improved to 47.0% from 46.5%; gross profit was S$27.2m.

• Net profit was S$8.0m (down 17.7%); EBITDA was S$18.4m with a 31.7% margin.

• Net cash from operations was S$14.6m; cash and bank balances at S$16.6m with no borrowings.

• Total dividend for FY2024 was 6.0 cents per share, 104% payout ratio.

Outlook and guidance

• Semiconductor sector expected to recover to 2022 peak by end-2024; global revenue forecasted to rise 9.8% to US$611b.

• FY2025 focus on returning US subsidiary to profitability, further cost reductions, and product mix optimization.

• Continued 'Five-Star Factory' initiative, prudent capital management, and building resilience for sustainable earnings.

• Focus on operational excellence, innovation, and high-performance teams for long-term growth.

• Vigilance on macroeconomic and geopolitical risks.