News Article
IQE annual revenues grow despite massive increase in capital expenditure
The wireless market accounted for more than 73% of revenues but the company lost out in the electronics sector where it made an operating loss of £548,000
IQE has announced its final results for the year ended 31 December 2011.
Total revenues were up 4% to £75.3 million from £72.7 million in 2010 despite a second half 2011 inventory correction. The global supplier of advanced wafer products and wafer services to the semiconductor industry also showed continued improvement in gross margins, which were up from 22.8% to 24.1%. EBITDA also rose by 6% to £14.0 million. Pre-tax profit was also up 9% from 2010 to £6.9 million and retained profit up 12% to £8.4 million.
Adjusted EPS was 1.86 pence (p), down from 2010, when it was 1.91p. Basic EPS was slightly down at 1.62p at the end of 2011, compared to 1.63p in 2010.
Capital expenditure in 2011 totalled £17.4 million, an over 210% rise from 2010, when it was £5.6 million. The company says this reflects the capacity expansion undertaken to meet the anticipated sales growth. In addition, £3.7 million was invested in new product development, as compared to £3.4 million invested in 2010.
Cash generated from operations was up from £10.3 million in 2010 to £10.8 million last year.
At the end of the year, IQE had a net debt of £3.9 million, whereas at the end of 2010, the firm had net funds of £7.0 million.
IQE’s three primary markets are wireless, optoelectronics and electronics. Below is a breakdown of the revenues for these segments in 2011 and 2010.
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Drew Nelson, IQE Chief Executive, comments, “Our strong growth momentum was temporarily impacted in the fourth quarter by inventory corrections at two of our major wireless customers. Despite this, I am pleased to report a year on year increase to record revenues and profits. These inventory corrections continued into the first quarter, but as anticipated, customer forecasts now reflect a return to growth as expected for Q2 and onwards."
“New product qualifications have progressed very well, with newly qualified products now ramping into production and other qualifications nearing completion. Furthermore, our capacity expansion programme remains on track, which is providing customers with a high degree of confidence in IQE as a key supplier as they keep their allocation of supplier shares under review."
“Our optoelectronics business has a number of near term opportunities which have progressed well during 2011 and which could result in a number of key products ramping to volume production as early as 2013. Following the year end, we announced a strategic investment in Solar Junction Corporation and an exclusive long-term supply agreement, a move that will accelerate our penetration into the exciting, third generation CPV solar market."
Nelson concludes, “The Board remains confident that IQE is well positioned for strong growth in 2012 and beyond.”
