Micro-Mechanics (Holdings), a manufacturer of high-precision tools and parts for the semiconductor industry, has posted net profit of $1.8 million for 3QFY2024 ended March 31, 12.8% higher y-o-y.
This comes despite an 8.7% decline in group revenue to $13.6 million during the quarter.
Chris Borch, chief executive officer of Micro-Mechanics, says the global semiconductor industry continued to work through excess inventory that had been built up during the industry’s recent cyclical slowdown. “Although the group experienced a decrease in quarterly revenue, we delivered higher net profit for 3QFY2024 due to our diligent efforts to control costs.”
The challenging market conditions in the global semiconductor industry were particularly significant in the Wafer-Fabrication Equipment (WFE) sector, adds Borch. This had an impact on the group’s subsidiary in the US (MMUS), which focuses on manufacturing process-critical products for the WFE sector.
Consequently, sales in the US decreased 42.0% y-o-y to $2.2 million in 3QFY2024 but remained as the group’s second-largest geographical market, behind China.
Sales to the Singapore market also declined 11.8% y-o-y to $1.4 million in 3QFY2024 due to lower sales of WFE products.
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The decrease in the group’s sales to the US and Singapore markets was partially buffered by higher sales in China, Malaysia and Taiwan, which are markets for its process-critical consumable tools and parts used in chip packaging processes, says the group.
In China,the group witnessed sales growth of 12.5% y-o-y to $4.7 million in 3QFY2024, driven by firm demand from the country’s electric vehicle and mobile phone sectors.
The Malaysia market posted a moderate 4.8% sales increase y-o-y to $2.2 million while sales in Taiwan jumped 61.3% y-o-y to $1.0 million in 3QFY2024.
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Borch says: “As we move into the final quarter of FY2024, we are cautiously optimistic that the worst of the downturn may now be behind us. At MMUS, we have taken various steps over the last nine months to lower the facility’s operating cost structure and put a stronger emphasis on process improvement and automation.”
As at March 31, the group had a balance sheet with total assets of $54.2 million, shareholders’ equity of $43.9 million, cash and cash equivalents of $13.1 million and no bank borrowings.
Shares in Micro-Mechanics close 2 cents higher, or 1.44% up, at $1.41 on April 30.
