Micro-Mechanics (5DD) H2 2024 earnings summary

Executive summary

• FY2024 revenue reached S$57.9 million, with positive quarter-on-quarter sales recovery, especially in China and Taiwan, despite an industry downcycle and US WFE sector slowdown.

• Net profit for FY2024 was S$8.0 million, with a 4.5% year-over-year increase in 4QFY2024 net profit to S$2.1 million despite lower revenue.

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

• Maintained strong governance, winning the Silver Award for Best Managed Board and ranking 22nd in the Singapore Governance and Transparency Index 2024.

Financial highlights

• Group revenue for FY2024 was S$57.9 million, down 13.6% year-over-year, with a 9.7% QoQ increase in 4Q2024.

• FY2024 net profit: S$8.0 million, down 17.7% year-over-year; 4QFY2024 net profit: S$2.1 million, up 4.5% year-over-year.

• EBITDA was S$18.4 million with a margin of 31.7%; gross profit margin improved to 47.0%.

• Net cash from operations was S$14.6 million; cash and bank balances increased to S$16.6 million with no borrowings.

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

Outlook and guidance

• Industry is in advanced stages of inventory rebalancing, with global semiconductor revenue forecasted to rise 9.8% to US$611 billion by end-2024.

• FY2025 focus on achieving profitability at MMUS, further cost reductions, and product mix optimization for the WFE sector.

• Continued implementation of the 'Five-Star Factory' initiative and disciplined capital management.

• Management remains cautiously optimistic about sector recovery and vigilant amid macroeconomic and geopolitical uncertainties.