Strong operating performance in first half of 2009 demonstrates
resilience of IQE's business model>
Strong operating performance in first half of 2009 demonstrates resilience of IQE's business model
(Thomson Reuters ONE) - 15 July 2009IQE plc (AIM: IQE, "IQE" or the "Group") the leading global supplierof advanced semiconductor wafer products and wafer services to thesemiconductor industry, provides a trading update for the first halfended 30 June 2009.The Group achieved a strong operating performance in the first halfof 2009 despite the industry wide destocking that adversely affectedsales during Q4 2008 and Q1 2009. As anticipated in the 2008preliminary announcement on 24 March 2009, this destocking ran itscourse in early Q2 and orders picked up sharply in May and June. TheBoard therefore expects that the Group's first half performance willbe at least in line with market expectations, with revenues of about£20.0 million and EBITDA of at least £1.2 million.This sound financial performance during an extremely tough economicenvironment clearly demonstrates the resilience of the Group'sbusiness model. The decisive and proactive action taken by managementduring Q4 2008 ensured that the business remained EBITDA positiveeven at the lowest point in the cycle in January and February of2009.As the business resumes rapid growth the Group will now continue tobenefit from lower costs and higher margins resulting from many ofthe structural efficiencies achieved.The increase in trading activity towards the end of the first halfhas seen some absorption of cash into working capital, reflectinghigher trading volumes. Net debt is expected to be better thanmarket expectations of approximately £20.0 million as at 30 Juneleaving more than £5.0 million funding headroom. The Group has beenoperating well within its banking arrangements and the Board expectsnet debt to decrease in the second half.The outlook for the second half remains positive, with the Groupexpecting continued strong growth in sales volumes. This positiveoutlook, despite the continuing backdrop of global economicuncertainty, reflects the Group's powerful positioning in its highgrowth markets, principally in wireless communications, including 3Gand feature rich smartphones.In addition, new product development continues with excellentprogress in solar activities, where customers are achieving worldrecord efficiency results, and in ultra low power LED products.Further progress on next generation electronic materials wasdemonstrated by the recent release of new engineered substrates suchas Germanium on Insulator (GeOI) for next generation integratedcircuits and devices.Dr Drew Nelson, IQE's Chief Executive, said:"We are seeing indicators of strong growth returning to a number ofthe high-end markets in which IQE operates and as anticipated in theMarch trading outlook, it is the smartphone products that have beenamongst the first to resume growth amongst our customer base."Our financial performance has remained strong. We are achievingoptimal production efficiencies with lean operations across the Groupand expect to benefit from our high operational gearing as salesgrowth recovers. The Board remains confident that strong demand forour exciting and innovative product range will resume during thesecond half of 2009."IQE expects to report its interim results on 2 September 2009.Contacts:IQE plc (+44 29 2083 9400)Chris MeadowsPhil RasmussenDrew NelsonNoble & Company Limited (+ 44 20 7763 2200)John Llewellyn-LloydSam ReynoldsCollege Hill (+44 20 7457 2020)Adrian DuffieldCarl FranklinNote to EditorsIQE is the leading global supplier of advanced semiconductor waferswith products that cover a diverse range of applications, supportedby an innovative outsourced foundry services portfolio that allowsthe Group to provide a 'one stop shop' for the wafer needs of theworld's leading semiconductor manufacturers.IQE uses advanced crystal growth technology (epitaxy) to manufactureand supply bespoke semiconductor wafers ('epi-wafers') to the majorchip manufacturing companies, who then use these wafers to make thechips which form the key components of virtually all high technologysystems. IQE is unique in being able to supply wafers using all ofthe leading crystal growth technology platforms.IQE's products are found in many leading-edge consumer,communication, computing and industrial applications, including acomplete range of wafer products for the wireless industry, such asmobile handsets and wireless infrastructure, Wi-Fi, WiMAX, basestations, GPS, and satellite communications; optical communications,optical storage (CD, DVD), laser optical mouse, laser printers &photocopiers, thermal imagers, leading-edge medical products,barcode, ultra high brightness LEDs, a variety of advanced siliconbased systems and high efficiency concentrator photovoltaic (CPV)solar cells.The manufacturers of these chips are increasingly seeking tooutsource wafer production to specialist foundries such as IQE inorder to reduce overall wafer costs and accelerate time to market.IQE also provides bespoke R&D services to deliver customisedmaterials for specific applications and offers specialist technicalstaff to manufacture to specification either at its own facilities oron the customer's own sites. The Group is also able to leverage itsglobal purchasing volumes to reduce the cost of raw materials. Inthis way IQE's outsourced services, provide compelling benefits interms of flexibility and predictability of cost, therebysignificantly reducing operating risk.IQE operates six manufacturing facilities located in Cardiff (two)and Milton Keynes in the UK; in Bethlehem, Pennsylvania and Somerset,New Jersey in the USA; and Singapore. The Group also has 11 salesoffices located in major economic centres worldwide.---END OF MESSAGE---This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
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Datum: 15.07.2009 - 08:01 Uhr
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