Micro-Mechanics Holdings net profit down 33.3% y-o-y to $4.1 mil for 1HFY2024

The company registered lower sales across the majority of its key geographical markets with the exception of China in the period.

Micro-Mechanics Holdings (MMH) 5DD has reported a net profit of $4.1 million for the six months ended 31 December 2023, down 33.3% from 1HFY2023.

This translates to earnings per share of 2.96 cents for 1HFY2024, down from 4.42 cents in the year earlier period.

For the semiconductor tools manufacturer, group revenue eased 20.5% to $29.4 million in 1HFY2024, in tandem with slow conditions in the global semiconductor industry during the period.

Cost of sales also eased to $15.4 million for the period, 19.1%  lower y-o-y compared to $19.1 million in 1HFY2023.

The company continued to experience significant challenges during 1HFY2024 with lower sales registered across the majority of its key geographical markets with the exception of China.

Sales in China increased 3.6% to $10.3 million in 1H24 and remained the company’s largest market with a contribution of 35% to total revenue. For 2QFY2024, the China market recorded robust growth of 12.8% to $4.9 million as domestic demand was driven by the electric vehicle and mobile phone sectors, as well as inventory build-up ahead of the Christmas and Chinese New Year holiday seasons.

On the other hand, sales in Malaysia declined 8.9% to $4.9 million while sales in the Singapore market contracted 55.9% to $2.2 million during 1HFY2024. Sales in the US market registered a decline of 33.9% to $6.2 million in 1H24, reflecting the slowdown in the wafer-fabrication equipment sector.

Consequently, gross profit saw a decline of 22.0% y-o-y to $13.9 million for 1HFY2024 from $17.9 million in the corresponding period the year prior. Net profit margin decreased to 14.0% in 1HFY2024 as compared to 16.6% in 1HFY2023.

As at end-2023, MMH had $15.0 million in cash and cash equivalents.

The board of MMH has declared an interim dividend of 3 cents per share (one-tier tax exempt) for 1HFY2024, which will be paid on Feb 19. MMH paid out a dividend of 6 cents per share for 1HFY2023.

CEO Chris Borch says: “Moving forward, we intend to continue focusing on a handful of key areas to put in place goals, structures and processes that will make it easier for the group to adapt to changes in the operating environment and ensure business continuity. Some of these areas include working on improving our position as a responsive, cost-effective and resilient supplier to our customers, strengthening our gross profit margin, and building a lean, effective and resilient operation.”

“We also believe that the ‘Five-Star Factory’ initiative that we recently began will help us to more clearly define and implement the fundamentals that each of our plants needs to achieve sustainable success,” he adds.

Shares in MMH closed 1 cent lower or 0.50% down at $2.00 on Jan 29.

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