IQE claims finances on track
UK-based semiconductor wafer developer, IQE, is confident it will meet its full year, finance expectations.
The business expects to report first-half revenues of approximately £34 million and earnings before interest, tax, depreciation and amortisation of approximately £4 million with net debt of less than £8 million.
IQE says the Board remains confident of meeting its full year expectations, given the notable second half bias in revenues this year as a consequence of the de-stocking in second half of 2011 and first quarter of this year, and the transfer of RF Micro Devices' epitaxial operation to IQE in July this year. The inventory correction with two major wireless customers in the latter part of 2011, as anticipated, impacted the first quarter of 2012.
Sales and customer order patterns returned to normal in the second quarter and the Group exited the half-year strongly.
Customer qualifications have progressed well, and the outlook for wireless remains strong, driven largely by the increasing penetration of smartphones and 4G/LTE technology. The major developments during the first half of the year were the completion of two strategic transactions: an exclusive supply contract and strategic investment in Solar Junction and the acquisition of the RF Micro Devices in-house epitaxial business. As the company also highlights, following the Solar Junction deal, there have been some significant project announcements, including a milestone 450MW installation in Mexico, which confirms that the CPV market is rapidly gaining traction. Solar Junction and IQE have received initial production orders and expect to capture a substantial share of this emerging market. The installation of tools is progressing well, in line with the Board’s expectations, and will be followed by a technology transfer. Once qualified, these tools will be used to satisfy existing production orders. Transfer of the RF Micro Devices epitaxial operation to IQE was completed during July. This business is expected to deliver a stepped increase in IQE revenues and profitability in the second half of 2012. This deal complements the Solar Junction investment by bringing spare capacity to service the high-growth CPV market. The business continues to make good progress across its optoelectronics and electronics businesses in development projects that span a number of emerging high-growth opportunities. “The deals with Solar Junction and RF Micro Devices represent significant milestones in the execution of our growth strategy and will significantly enhance both our short and long term growth,” said Drew Nelson, IQE’s chief executive. “They are highly complementary, extending our critical mass and global leadership in wireless, and bringing spare capacity to service the emerging high growth CPV market.” “The outlook for the Group’s core wireless markets continues to look strong and with our capacity expansion programme nearing completion, we are well positioned to deliver strong sales growth and return to free cash generation,” he added. IQE expects to report its interim results in the week commencing 24 September 2012.
