AEM reports record revenue and earnings for 2Q

SINGAPORE (Aug 10): AEM Holdings, the provider of equipment systems solutions and manufacturing services, reported record revenue and earnings for the 2Q19 ended June.

Earnings for 2Q19 came in at $15.7 million, 65.4% higher than the $9.5 million a year ago. Fully diluted earnings per share for 2Q19 was 5.76 cents, compared to 3.50 cents for 2Q18.

The record 2Q19 bottomline also brings 1H19 earnings to $22.3 million, 25.9% higher than last year.

The group’s revenue increased 34.8% to $97.9 million in 2Q19, primarily generated by the Equipment Systems Solutions (ESS) business.

By business segments, ESS revenue increased by 33.6% to $94.9 million mainly due to the increase in orders from its main customer.

All other business segments of System Level Test & Inspection (SLT-I), Micro-Electro-Mechanical Systems (MEMS) and Test and Measurement Solutions (TMS) also recorded a growth in sales in 2Q19 mainly with orders from new and existing customers.

Raw materials and consumables cost increased by 25.9% to $62.8 million.

Material margin improved 4.5 ppt to 35.9% in 2Q19 from a year ago, mainly attributable to favourable changes in product mix and higher revenue contribution from engineering development projects.

Profit before tax rose 64.8% to nearly $19 million.

Net profit margin increased by 2.9 ppt to 16.0% in 2Q19 from 13.1% in 2Q18.

Year to date, AEM has generated operating cash flow of $20.5 million, before taking into account working capital changes. As at June 30, the group’s net cash position of $57.4 million as at 30 June 2019. Net asset value per share was 39.3 cents, compared to 33.3 cents as at Dec 31 2018.

The group has declared an interim dividend of 2.0 cents per ordinary share, representing a payout of 24.2% on earnings. in 1H19.

In its business overview and outlook statement, AEM says 1H19 has been a record half as its key customer introduces new products based on more advanced semiconductor nodes.

On July 25, the group announced sales orders worth $255 million for delivery in FY19, and revised its revenue guidance for FY19 to be between $265 million to $280 million.

On the TMS Group, AEM says it has delivered optical fibre cable-test equipment to Huawei for its high-performance short reach cabling links for 5G backhaul network. It is currently working with Huawei, CETC23 and their suppliers to offer them additional systems and solutions

AEM executive chairman Loke Wai San says, “AEM has gradually built up our portfolio of testing solutions that radically reduce the cost-of-test for our customers in MEMS, Quantum Computing, Logic ICs and 5G infrastructure. With sustained investments in R&D and accelerated sales and marketing initiatives, we will continue to strengthen our market leading position in the semiconductor and communications industries in the interconnected 5G and datacentric world.”

Shares in AEM closed 3 cents higher at $1.12 on Thursday before the results announcement.