Ayala's IMI posts lower profit due to high costs

ABS-CBN News

Posted at Nov 10 2011 02:28 PM | Updated as of Nov 10 2011 10:31 PM

MANILA, Philippines - Ayala-led Integrated Micro-Electronics Inc. (IMI) said Thursday its net income during the first nine months of the year declined by 67% due to high costs.

In a statement, IMI, a leading provider of electronics manufacturing services, said it recorded a net income of $1.6 million in January to September 2011, down 67% from $4.93 million the year before.

This despite a 43% growth in revenues to $420.1 million.

"Higher material and direct labor costs caused margins to decline," IMI said. Cost of goods sold by the company went up 47% to $389.471 million, while its operating expenses jumped 26% to $32.722 million.

Nonetheless, IMI noted its businesses in the Philippines and China remained "strong." It said it also booked additional revenues from unit PSi Technologies Inc. and its new entities in Eastern Europe and Mexico.

"Given a very challenging landscape, we manage to remain profitable," said IMI president and CEO Arthur Tan.

"Our diversification strategy has given us access to more regions and markets. This flexibility helps in lessening the impact of business downturns on our performance."

IMI's operations in China and Singapore generated $213.8 million revenues in the nine-month period, up 16% year on year, thanks to new turnkey programs for major customers. Its Philippine operations posted $118.2 million revenues, higher by 9%, due to robust demand from the automotive and industrial sectors.

PSI contributed $61.4 million revenues, while sales in Bulgaria, Czech Republic and Mexico reached $25.7 million.