Micro-Mechanics (5DD) Q1 2025 earnings summary

Executive summary

• Achieved third consecutive quarter of revenue growth, with 1QFY2025 revenue at S$16.2 million, up 2.5% year-over-year and 8.8% sequentially.

• Net profit rose 14.0% year-over-year to S$3.1 million, with margin expansion and improved profitability, especially at the US subsidiary after restructuring.

• Gross profit margin expanded to 50.7% from 48.8% a year ago, driven by improved operating leverage and product mix.

• Positive operating cash flow of S$4.1 million and free cash flow of S$2.8 million for 1QFY2025, with a net cash position of S$19.3 million.

• Continued execution of the 'Five-Star Factory' initiative to drive operational excellence and efficiency.

Financial highlights

• Group revenue reached S$16.2 million (+2.5% yoy, +8.8% qoq); EBITDA was S$5.8 million with a margin of 35.7%.

• Net profit: S$3.1 million (+14.0% yoy); net profit margin improved to 18.9%.

• Gross profit: S$8.2 million (+6.5% yoy); gross margin: 50.7%.

• Earnings per share increased 13.9% year-over-year to 2.21 cents.

• Net asset value per share: 35.15 cents (up from 33.14 cents at 30 June 2024).

Outlook and guidance

• Management remains cautiously optimistic about the semiconductor industry’s recovery amid macroeconomic and geopolitical uncertainties.

• Global semiconductor sales are expected to recover to 2022 peak by end-2024 and grow 12.5% in 2025.

• Focus remains on operational excellence, innovation, and disciplined capital management.

• Continued vigilance and investment in core business foundations to support sustainable long-term growth.

• Focus on sustaining earnings recovery, returning US operations to profitability, and sharpening engineering focus for WFE sector.