Micronas reports healthy incoming orders in third quarter
- As expected, the loss of production in Japan dampened Automotive sales in the third quarter
- Incoming orders increased thanks to early recovery of Japanese car industry
- Investment in X-FAB secures future manufacturing technologies
- Value adjustment of Trident shares takes CHF 7.3 million off financial result
- For 2011 as a whole, Micronas now expects sales of CHF 155 million, and an EBIT margin of 12 percent
Micronas Group's consolidated net sales (Automotive and Consumer) in the third quarter came to CHF 35.5 million, and in the first nine months of 2011 to CHF 115.2 million, compared with CHF 145.2 million in the first nine months of 2010. This decline is due mainly to the discontinuation of sales of Consumer products and dashboard controllers. Operating profit (EBIT) for the third quarter came to CHF 5.2 million, and for the nine-month period to CHF 13.5 million (first nine months 2010: CHF 17.4 million), which gives an EBIT margin of 11.7 percent of sales for the first nine months of 2011.
In the third quarter, Micronas had to adjust the value of its participation in Trident Microsystems, Inc. because of the continuing volatility of equity markets. Micronas acquired this stake in 2009 when it sold its Consumer product lines. This adjustment reduced the financial result by CHF 7.3 million. After taking financial expense and income and taxes into account, there was a loss of CHF 2.4 million for the third quarter and of CHF 1.1 million for the nine-month period. Earnings per share for the first nine months of 2011 stood at CHF -0.04 (first nine months 2010: CHF 0.53). On September 23, 2011, Micronas held cash and cash equivalents of CHF 145.6 million, compared with CHF 165.4 million at end-2010. With equity capital at CHF 115.8 million (CHF 122.7 million in 2010) the equity ratio came to 42.3 percent.
As expected, the loss of production in Japan dampened Automotive sales in the third quarter. They fell by 9.8 percent compared with the previous quarter to CHF 33.0 million. Sales for the first nine months of 2011 went down by 10.9 percent compared with the year-back figure to CHF 109.4 million. After adjusting for currency fluctuations (in euros), the decline in dashboard controllers was offset by growth in sales of Hall sensors. Operating profit (EBIT) came to CHF 10.1 million (first nine months 2010: CHF 14.6 million). As announced, sales of dashboard controllers will fall to a very low level over the course of the year.
The early recovery staged by the Japanese car industry, which by the end of the third quarter had returned to the production levels of early 2011, had a positive effect on incoming orders. The book-to-bill ratio for the Automotive division at Micronas was 1.12 in the third quarter. Incoming orders rose by 22.5 percent compared with the second quarter to CHF 38.6 million.
In the first nine months of 2011, sales of Consumer products still contributed CHF 5.8 million to the total (first nine months of 2010: CHF 22.4 million), with CHF 2.6 million of this coming in the third quarter. Operating profit (EBIT) for the first nine months came to CHF 3.4 million.
On August 24, 2011, Micronas announced a cooperation agreement and strategic partnership with
X-FAB Silicon Foundries Group, a leading international foundry group based in Erfurt that specializes in analog and mixed-signal semiconductor applications. Working with Micronas as its foundry partner,
X-FAB will produce the next generation of wafer technology for applications using modular CMOS processes in geometries of 0.18 µm with embedded Flash. It will also manufacture the relevant products. This partnership will give Micronas access to future manufacturing technologies. Micronas will support X-FAB as its technology partner and retains the option to move over to its own manufacturing in future. Micronas is also taking a EUR 10 million shareholding in X-FAB Group.
Utilization of production capacity at the Micronas manufacturing facilities in Freiburg climbed to almost 75 percent in the third quarter. This capacity includes the front-end wafer fab and the back-end assembly and testing areas. Short-time working was suspended during the holiday months over the summer. Since October 1st it has been reinstated in some areas of manufacturing.
Owing to the early recovery of Japan’s automotive sector, the Board of Directors and Management now expect sales of CHF 155 for the 2011 financial year, including likely Consumer sales of CHF 7 million. The EBIT margin is expected to be 12 percent.
Micronas (SIX Swiss Exchange: MASN), a semiconductor designer and manufacturer with worldwide operations, is a leading supplier of cutting-edge sensor and IC system solutions for automotive and industrial electronics. Micronas offers a wide range of Hall-effect sensors and embedded microcontrollers for automotive and industrial applications, for instance in drive trains, chassis frames, engine management and in convenience functions.