AEM shares tumble 15% after first-half profit falls 95.4%

SINGAPORE – AEM Holdings said its first-half net profit plunged 95.4 per cent to $895,000, from $19.7 million a year earlier, as demand from a key chip customer weakened.

AEM shares closed down 22 cents or 15.1 per cent to $1.24, after earlier falling as much as 19 per cent.

Revenue for the six months to June 30 fell 36.9 per cent year on year to $173.6 million from $275.2 million previously.

The semiconductor test equipment maker on Aug 14 said this was due to a 42.1 per cent decline in revenue for its test cell solutions segment, on account of weaker demand from the group’s key semiconductor customer.

Contract manufacturing revenue for the half-year also declined, dropping by 28.8 per cent, due to prolonged inventory digestion in the industrial sector.

Earnings per share for the period fell to 0.29 cent from 6.37 cents a year earlier.

The company said that its management was proactively rationalising its cost structure and realigning talent across the group to drive new business growth.

“This has yielded a positive profit before tax despite markedly lower revenue from the year prior, while obtaining key milestone wins with its new marquee customers,” AEM said.

For the second half of 2024, the group forecasts revenue to be in the range of $160 million to $180 million.

It said: “Despite moderate test utilisation and a decrease in near-term new capacity demand from the group’s key customer, quarter-on-quarter revenue growth is anticipated in the fourth quarter of 2024, driven by new customer business growth.”

AEM chief executive Amy Leong said: “We are committed to optimising our operational efficiency and operating expenses while maintaining our core investments in technology development and commercialisation efforts to drive strategic growth.”

She added: “I look forward to sharing my vision for AEM during our Q3 2024 results briefing in November.” THE BUSINESS TIMES