MANILA, Philippines – Integrated Micro-Electronics Incorporated (IMI), manufacturing arm and subsidiary of Ayala Corporation, reported a massive drop in its earnings for the 1st half of 2019 due to the global economic slowdown and tense geopolitical issues.

In a disclosure to the Philippine Stock Exchange on Thursday, August 1, IMI reported that its net income for the 1st half of the year dropped by 82% to $5.8 million from $31.6 million a year ago.

IMI said its consolidated revenues also dropped by 5% to $636 million.

“Sales were impacted by the slowdown of the global economy, a downturn in the automotive market, and geopolitical issues in our key markets in China and the [United Kingdom],” IMI said.  

The company’s profitability was also challenged by lower volume demand on new programs where it invested, persistent component shortages which drove higher material prices, and delays of new generation chipsets.

IMI specializes in electronics for the automotive, industrial electronics, and aerospace markets. It has 21 manufacturing plants across 10 countries and provides engineering, manufacturing, and support and fulfillment capabilities to diverse industries globally.

IMI said its core business was adversely affected by the slowdown of the Chinese automotive market, where electronic vehicle incentives were reduced. (READ: Chinese carmakers show goods in Geneva as sales tank at home)

“A significant portion of our core revenues through our Bulgaria and Czech Republic operating sites were also held back by the depreciation of the euro against the US dollar,” IMI said.

IMI president and chief operating officer Gilles Bernard noted that political and economic market factors held back the company’s revenue growth.

“With significant investments for new technology projects made in the past years, IMI remains ready to serve the upcoming surge in the global electronics market,” Bernard said.

IMI chief executive officer Arthur Tan said that despite the challenges, the company sees opportunities everywhere, particularly in autonomous and electric vehicle technologies, the emergence of 5G technology, and power module applications.

“Despite the challenges we’ve faced these recent months, we remain confident that we have positioned ourselves as a key player in the electronics supercycle,” Tan said. – Rappler.com