AEM Holdings has reported a loss of $20.9 million for 2HFY2023, as it books a US$20 million arbitration settlement on top of a weaker industry down cycle.
Profit before tax excluding exceptional items of $38.3 million was over the same period.
In the year-earlier 2HFY202, it reported earnings of $44.2 million.
For the whole of FY2023, AEM dipped into a loss of $1.16 million -- a sharp swing from earnings of $127.3 million reported for FY2022.
Revenue for 2HFY2023 dropped 37.6% y-o-y to $206.1 million, bringing full-year revenue to $481.3 million, down 44.7%.
AEM will not pay a final dividend as it prefers to channel its resources into investing for growth. The company paid 10.3 cents for FY2022.
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On the other hand, it plans to give a bonus issue of 1 share for every 100 shares held, to signal its confidence that it can deliver future value.
The company was in the news recently for overstating its inventory level. Having hired KPMG and other consultants, AEM is taking an inventory adjustment of $21.1 million, within the range it had earlier guided.
AEM maintains that the error was caused by "deficiencies in processes, systems, policies, and controls, and are compounded by users' inadequate understanding of system functions, which led to incorrect transactions."
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AEM chairman Loke Wai San affirms the company's commitment to transparency, integrity, and continuous improvement.
"We aim to not only address current challenges but also enhance our capabilities for sustained success," he says.
To demonstrate accountability, the senior management team will not receive any bonus, thereby reducing their annual cash compensation by as much as 50%.
In addition, CFO Leong Sook Han has resigned "to pursue personal interests".
As the search for the new CFO is underway, group financial controller Lim Kim Hua has been promoted to vice president of group finance and will take on Leong's responsibilities in the interim.
AEM is upbeat that the current boom in demand for AI-related computing is positive for its business and that it is "well positioned to take advantage of the AI inflection point as it migrates from the data centre to the edge in late 2024 and beyond."
However, it warns of "limited" visibility outside of AI, due to the long-dated purchase order program AEM has with its key customer which it did not name but which investors understand to be Intel Corp.
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As such, it is only giving a revenue guidance of between $170 million and $200 million for 1HFY2024, instead of providing a full-year projection.
AEM’s CEO Chandran Nair says that while the pace of the industry recovery remains largely uncertain, the long-term prospects remain bright, due to the company's capabilities in this field.
"We are confident that AEM will emerge from the current market condition a leaner company with technology leadership in test," says Nair.
AEM shares closed at $2.65 on Feb 28, down 2.93% for the day and down 3.99% in the past 12 months.
