AYALA-LED Integrated Micro-Electronics, Inc. (IMI) said on Thursday that it is poised to end the year with lower-than-expected capital investments of around $25 million.
“Initially our target for the year should be close to $30 million but given that we are trying to defer some of the capital expenditures (capex) and just focusing on the critical ones maybe it could be at a similar level as last year $22 million to an average of $25 million,” said Laurice S. Dela Cruz, chief financial officer of IMI on the second day of the PSE STAR event.
So far this year, the company has spent $11.1 million in capital investments mainly on machinery and construction, which comprised 40% and 36% of the total, respectively.
For 2022, IMI spent $21.2 million on capex related to new programs. In its annual report, the company said that it expects to spend $30 million to $40 million in 2023.
However, IMI President Jerome S. Tan said he expects capital investments to grow in 2024 due to planned expansions.
“A lot of the focus is shifting more toward how we can source outside of China so there is strong demand in North America to onshore. And North America includes Mexico so there are some discussions that we are having to see whether that would be an opportunity for an area for us to expand,” said Mr. Tan.
He added that Europe is also an area where the company sees a need to expand despite its current operations in the region.
“I think the overall capex next year will definitely be higher than this year and as things start to normalize, then we can be more aggressive in expanding the business,” he said.
The company incurred a net loss of $82.91 million in the second quarter, significantly wider than last year’s loss of $3.55 million.
The decline can be attributed to the $83.68 million miscellaneous losses booked for the three months ended June due to the sale of the company’s 80% stake in STI Enterprises Ltd.
From April to June, IMI’s revenues totaled $345.07 million, a decline of 3.3% from the $356.91 million booked last year. Cost of sales was 5.2% lower at $312.03 million from $329.95 million a year ago.
In the first half, the company’s net loss attributable to equity holders amounted to $83.66 million, widening last year’s loss of $5.51 million. This is despite a slight increase in the company’s top line to $691.89 million from $690.86 million.
IMI is a listed electronics manufacturing services company serving markets such as the automotive, industrial, consumer, telecommunications, and medical industries.
On Thursday, stocks of IMI dropped by 28 centavos or 6.22% to P4.22. — Justine Irish D. Tabile
