IQE PLC Trading Update
18 Novembre 2019 - 8:00AM
UK Regulatory
TIDMIQE
IQE plc
("IQE", the "Company" or the "Group")
Trading Update
Cardiff, UK 18 November 2019: IQE plc (AIM: IQE) the leading supplier of
advanced wafer products and material solutions to the semiconductor
industry, announces the following trading update for the full year ended
31 December 2019.
IQE now expects to deliver revenue of between GBP136m and GBP142m,
compared to the previous guidance range of GBP140m to GBP160m, including
a forex tailwind of circa GBP3m.
A mid-single digit adjusted operating loss is now expected resulting
from revenues being slightly below the previous guidance range,
additional one-off commissioning costs at the new foundry in Newport,
general diseconomies of scale associated with operating at low volume in
some sites and the inclusion of losses for the Singapore CSDC entity as
announced in October.
In Photonics, consistently strong 3D sensing volumes with the Company's
largest Vertical Cavity Surface Emitting Laser (VCSEL) customer have
been achieved in H2 2019, underlining IQE's lead position for epi-wafers
in this supply chain. The Company continues to make good progress on a
significant number of Android-related supply chains including two
recently announced production qualifications. The market for Indium
Phosphide lasers for datacom / telecom has remained weak but with signs
of growth for 2020, particularly in Asian markets.
In Wireless, there have been continued low volumes of orders and
reductions in inventory by our major RF chip customers in the US, offset
to a limited extent by a promising increase in production for Asian
supply chains. IQE has qualified 3 tools, with 2 further tools in the
process of qualifying, with a major Taiwanese foundry. The Company
continues to make good progress on new product development in the areas
of RF Filters and Switches for 5G.
Since June, the Company has taken steps to reduce costs and capital
expenditure as the infrastructure phase of capacity expansion has been
completed. Capex will be towards the bottom end of the previous guidance
of GBP30-40m and the net debt position at year end is expected to be
between GBP15m to GBP20m, against increased debt facilities of GBP57m
announced in June.
The outlook for 2020 includes a seasonally weak Q1 and continued supply
chain transitions in the wireless market. Beyond Q1 2020, IQE is
cautiously optimistic about a return to growth, driven by expected
content gains in an expanding market for 3D sensing, demand for GaN to
meet accelerating 5G infrastructure deployments and expanding Asian
market opportunities for both Photonics and Wireless products as supply
chains continue to localise. Taking all of the above into account, the
Company expects total revenue will return to moderate growth in 2020.
Dr Drew Nelson, Chief Executive Officer of IQE, said:
"IQE has experienced very challenging market conditions in 2019.
Shortfalls in revenue relate predominantly to two major customers, with
whom IQE is confident it has not lost share and who remain very well
positioned for returns to growth in 2020. Indeed, the Company remains
well positioned to capitalise on an expanding future compound
semiconductor market opportunity driven by the macro trends of 5G and
connected devices. In order to fully realise this opportunity, the
recently announced Executive Management Board is already making good
progress in driving the Company's approach to increasing profitability,
with specific responsibilities assigned for programs on operational
execution, new technology introduction, revenue expansion through
customer proximity and diversification, and strong cost management."
IQE will be holding a conference call for Analysts and Institutional
Investors at 08:00 London time today.
CONTACTS
IQE plc
+44 (0) 29 2083 9400
Drew Nelson
Tim Pullen
Peel Hunt LLP (Nomad and Joint Broker)
+44 (0) 20 7418 8900
Edward Knight
Nick Prowting
Christopher Golden
Citigroup Global Markets Limited (Joint Broker)
+44 (0) 20 7986 4000
Christopher Wren
Peter Catterall
Headland Consultancy (Financial PR)
+ 44 (0) 20 38054822
Andy Rivett-Carnac: +44 (0) 7968 997 365
Tom James: +44 (0)78 1859 4991
This announcement contains inside information for the purposes of
Article 7 of Regulation (EU) No 596/2014 ("MAR"). Upon the publication
of this announcement, this inside information is now considered to be in
the public domain.
For the purposes of MAR and Article 2 of Commission Implementing
Regulation (EU) 2016/1055, this announcement is being made on behalf of
IQE by Tim Pullen, Chief Financial Officer.
ABOUT IQE
http://iqep.com
IQE is the leading global supplier of advanced compound semiconductor
wafers that enable a diverse range of applications across:
-- handset devices
-- global telecoms infrastructure
-- connected devices
-- 3D sensing
The macro trends of 5G and connected devices are expected to drive
significant growth for compound semiconductors over the coming years.
As a scaled global epitaxy wafer manufacturer, IQE is uniquely
positioned in this market which has high barriers to entry. IQE supplies
the whole market and is agnostic to the winners and losers at chip and
OEM level. By leveraging the Group's intellectual property portfolio
including know-how and patents, it produces epitaxy wafers of superior
quality, yield and unit economics.
IQE is headquartered in Cardiff UK, and is listed on the AIM stock
Exchange in London.
(END) Dow Jones Newswires
November 18, 2019 02:00 ET (07:00 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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