AEM sinks into the red with H2 net loss of S$20.9 million; proposes no dividend

SEMICONDUCTOR equipment maker AEM Holdings on Wednesday (Feb 28) reported a net loss of S$20.9 million for the six months ended Dec 31, 2023, reversing a net profit of S$44 million in the corresponding period a year earlier.

The loss follows the declining trend in the group’s net profit, which has plunged 76 per cent year-on-year to S$19.7 million in the first half of FY 2023.

The results translate into a loss per share of S$0.0676, as compared to an earnings per share of S$0.1423 for H2 2022.

Revenue for H2 2023 dropped 38 per cent to S$206.1 million from S$330 million.

The group attributed the continual profit decline to the slowing down of the semiconductor industry, which started in H2 2022, lasted throughout 2023, and “will continue through at least 1H 2024”.

It added that “a combination of reduced end-customer demand and excess inventory pushed out capital expenditure in the industry. This resulted in reduced test equipment purchases, and shifted out test equipment procurement for new programs that the group had previously announced”.

For the financial year, revenue was down 45 per cent to S$481.3 million from S$870.5 million in FY 2022. Net loss stood at S$1.2 million, a significant decrease from the net profit of S$126.8 million a year earlier.

The board of directors recommended no dividend for H2 2023, while a final dividend of S$0.036 per share was declared for the same period a year earlier. An interim dividend of S$0.067 was also declared for H1 2022.

The group said that it has decided to not pay dividend in order to continue to invest in new customer programs.

Instead, it will undertake a bonus issue of shares of one share for every 100 shares pursuant to a general share issue mandate, subject to approval of the shareholders.

Looking ahead, the group foresees inventory levels to normalise, while end-customer demand for PCs and smartphones to recover slightly from 2023 lows.

Chandran Nair, AEM’s chief executive, said: “While the pace of the industry recovery remains largely uncertain, the group’s long-term prospects remain bright, underpinned by the structural trend of higher test intensity and increased test complexity.”

He added that the group is well positioned to take advantage of the artificial intelligence (AI) boom by addressing the test demand for newly developed AI devices.

Before the earrings announcement, shares of AEM closed on Wednesday at S$2.65, down S$0.08 or 2.9 per cent.