UMS Integration (558) Q2 2024 earnings summary

Executive summary

• Revenue for 1H2024 declined 29% year-over-year to S$109.9 million, mainly due to weaker global semiconductor demand, while aerospace revenue grew 12%.

• Net profit attributable to owners fell 34% to S$19.1 million for 1H2024, with gross margin improving to 53.3% from 48.3% due to a favorable product mix and exchange rates.

• All core business segments saw quarter-on-quarter sales improvement in 2Q2024, with Aerospace up 24% and Semiconductor up 1%.

• Net cash increased by S$29.9 million to S$74.9 million as of June 2024, mainly from a share placement and operating cash flow.

• Proposed interim dividend of 1.0 cent per share, payable 25 October 2024.

Financial highlights

• 2Q2024 revenue dropped 25% year-over-year to S$56 million, but rose 3.7% sequentially from 1Q2024.

• Semiconductor segment sales fell 33% year-over-year for 1H2024, while aerospace rose 12%.

• Net profit for 1H2024 was S$19.5 million, down 35% year-over-year; EPS for 1H2024 was 2.72 cents, down from 4.32 cents.

• Cash and cash equivalents increased to S$76.4 million at end-June 2024, up from S$67.5 million at end-2023.

• Free cash flow for 1H2024 was negative S$0.8 million (vs positive S$33.4 million in 1H2023), mainly due to higher capex and inventory.

Outlook and guidance

• Revenue and profits are stabilizing, supported by the aviation boom and gradual semiconductor recovery.

• Management expects to remain profitable in FY2024, supported by semiconductor sector recovery and aviation growth.

• The group expects to benefit from global semiconductor equipment sales growth and expanded production capacity in Penang.

• The Group plans a secondary listing on Bursa Malaysia to broaden investor base and support future growth.