Costs associated with KL plant closure drags Stats ChipPac's results deeply in the red

The closure of a plant in Kuala Lumpur has plunged Stats ChipPac deeply in the red.

The semiconductor test assembly provider reported a second quarter net loss of US$52.2 million (S$66.1 million), reversing from a profit of US$8.9 million previously.

It recorded plant closure costs of US$36.5 million, which included employee severance and benefit costs of US$17.8 million, non-cash asset impairment charges of US$17.7 million and other associated costs amounting to US$1 million.

Revenue for the three months to June 30 fell by 6.2 per cent to US$396.4 million.

This reflected weak demand in wireless communications market targeted at high-end smartphone segment that was partially offset by strength in the low-cost smartphone segment.

Loss per share amounted to two US cents.

Net assets value per share shrank to 44 US cents compared to 46 US cents as at Dec 31.

Based on current visibility, Stats ChipPAC expects net revenues in the third quarter to be zero to 6 per cent higher compared to the second quarter, adjusted EBITDA - a gauge of operating profit - in the range of 21 per cent to 24 per cent of revenue.

It also expects capital expenditure spending of about US$100 million to US$120 million in the third quarter to expand its wafer level packaging capacity in support of anticipated customer demand for advanced packaging and test turnkey services.

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