Strong Position For Next Growth
IQE plc has announced its Interim Results for the half year ended 30 June 2009. The company saw sales of £21.4m (H1 2008: £30.2m) with a gross profit of £3.8m (H1 2008: £4.3m) with a net debt of £18.9m, that was better than expectations. The company saw a sharp increase in orders from May 2009 as destocking began to reach its conclusion. There has been a continued strength in smartphone and advanced wireless shipments (e.g. notebooks) despite global recession. This combined with management actions in Q4 2008 to restructure the business and reduce costs have underpinned a solid H1 performance. The company has also actively sought opportunities during the downturn that has enabled them to capture market share, attract new talent, and drive operational efficiencies. IQE sees further evidence of the trend towards outsourcing as their customers seek to control capital and operating expenditure. IQE is reporting that trading has already returned to pre-recession levels in Q3 2009, positioning the Group for a strong second half performance. There has also been significant progress in high-growth emerging markets of solar and solid state lighting. IQE’s industry-leading CPV solar cell products gaining market share, contributing to H2 sales.
Dr Drew Nelson, IQE Chief Executive, commenting on the results said:
“IQE is in a strong position, having taken decisive action to cut costs and restructure for growth. Our core smartphone market has recovered quickly and is now growing rapidly as phones become more connected and multi-functional, demanding ever more of our products. Furthermore, we have significant opportunities ahead of us in the emerging solar cell and solid state lighting markets.
“Even at the lowest point of the destocking cycle, IQE remained EBITDA positive, demonstrating the effectiveness of our restructuring and the resilience of our business. Now that trading has recovered, our high level of operational gearing should produce a strong second half with substantial free cash flow generation."
IQE will continue to focus on fast growing, large volume technologies and in particular high-speed wireless communications and advanced optoelectronics. The Group continues to develop advanced solar cell technology, high-efficiency solid-state light sources, advanced lasers and ultra-high-speed microprocessor and memory-chip materials technologies for these large-volume emerging markets.