Micro-Mechanics (5DD) Q1 2025 earnings summary

Executive summary

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

• Net profit increased to S$3.1m (+14.0% yoy), with net profit margin improving to 18.9%.

• Core operating performance improved, especially at the US subsidiary, following restructuring and cost optimization.

• Gross profit margin expanded to 50.7%, driven by improved operating leverage and product mix.

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

Financial highlights

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

• Net profit: S$3.1m (+14.0% yoy; +48% qoq); earnings per share: 2.21 cents.

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

• Net cash from operations was S$4.1m; cash and bank balances stood at S$16.6m–S$19.3m as of 30 Sep 2024, with no borrowings.

• CAPEX for the quarter was S$610k, representing 3.8% of sales, mainly for plant and equipment upgrades.

Outlook and guidance

• Sector outlook remains positive, with the semiconductor industry in advanced stages of inventory and production rebalancing.

• FY2024 global semiconductor revenue grew 9.8% to US$569b; 2024 sales forecast at US$611b, with 12.5% growth expected in 2025.

• The Group remains cautiously optimistic amid macroeconomic and geopolitical uncertainties.

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

• Continued disciplined capital management, maintaining zero bank borrowings and steady dividends.