Sales and earnings in second quarter better than forecast (PR0808)
Zurich, July 15, 2008 - In the second quarter of 2008, Micronas turned in a slightly improved performance, defying earlier forecasts. Consolidated net sales were 13.0 percent down on the first quarter at CHF 147.6 million. Net sales for the first half came in at CHF 317.2 million. The operating loss (EBIT) deteriorated compared with the previous quarter to CHF 10.1 million. Sales in the Automotive division were on a par with the previous quarter, with EBIT slightly down. In the Consumer division, the slowdown in the market resulted in a decline in sales and an increase in the operating loss compared with the first quarter. However, both indicators produced a better result than had been predicted. There is no ignoring the fact that the expected growth drivers of the current year – Euro 2008 and the Olympic Games in Beijing – have so far had little impact on the market. Hard-fought competition and a price war between consumer goods manufacturers is reflected in the struggle between component suppliers and maintains margin pressure. The uncertain outlook in key markets will also affect the performance in the second half.
Operating profit before depreciation and amortization (EBITDA) for the second quarter amounted to CHF 6.7 million. The operating loss (EBIT) deteriorated compared with the previous quarter to CHF 10.1 million. This resulted in an operating loss for the first half of CHF 13.9 million. The loss for the reporting period was CHF 8.2 million in the second quarter and CHF 16.0 million in the first semester, with earnings per share at CHF -0.28 and CHF -0.54 respectively. Micronas has net cash of CHF 269.9 million as at the end of June 2008.
Sales in the Automotive division were on a par with the first quarter at CHF 53.0 million. Operating profit (EBIT) fell slightly on the previous quarter to CHF 11.4 million, equivalent to an EBIT margin of 21.4 percent for the second quarter.
Strong demand for smart, light, cost-effective electronics components is continuing to have a positive impact on the performance of the Automotive division. On the strength of its established position in the Hall sensors market, Micronas is receiving a growing number of queries from Japan for new projects, including some from previously cautious customers. Micronas is significantly strengthening its marketing activities to take full advantage of the numerous growth opportunities. The first step is to target the market for industrial applications with existing automotive products.
The Consumer division continues to be much influenced by the restructuring measures, which are being implemented according to schedule. Sales totaled CHF 94.6 million in the second quarter of 2008, 18.4 percent down on the previous three months. The operating loss (EBIT) amounted to CHF 21.5 million.
The sector's high hopes that Euro 2008 would give a strong boost to the TV market were not fulfilled. The order intake, which was diminishing in the first quarter, recovered in the reporting period. Intensification of the competitive struggle between manufacturers has resulted in pricing pressure to which Micronas is not immune.
Based on the actual order backlog and market view, Micronas expects third-quarter sales and operating loss to reach the same level as in the second quarter.
With earlier market assessments increasingly being confirmed, Micronas expects sales for the year as a whole of CHF 600 to 620 million, on an operating loss of between CHF 40 and 50 million. The Consumer division will contribute sales of between CHF 390 and 400 million and Automotive between CHF 210 and 220 million. Micronas confirms the EBIT guidance for Consumer of CHF -85 to -90 million and for Automotive of between CHF 40 and 45 million.
The Micronas Group is a leading independent supplier of innovative application-specific semiconductor solutions for consumer and automotive electronics. Its shares are listed on the SWX Swiss Exchange in Zurich.
Zurich, July 15, 2008