ASM Pacific expects rebound in sales

PUBLISHED : Tuesday, 17 April, 2007, 12:00am
UPDATED : Tuesday, 17 April, 2007, 12:00am

ASM Pacific Technology, the world's largest supplier of semiconductor assembly equipment by revenue, said sales would rebound this quarter after slowing in the first three months of this year as expected.

'Our sales in 2007 will be more than last year if the rebound comes in April,' chief executive Lee Wai-kwong said. 'But if the rebound will come in October, sales this year will definitely drop from a year ago.'

Hong Kong-listed ASM Pacific's second-half earnings fell 0.5 per cent to HK$524 million from a year earlier while sales rose 9.8 per cent to HK$2.28 billion, little changed from the first half.

Full-year net profit grew 35 per cent to HK$1.15 billion last year after sales rose 28.8 per cent to HK$4.56 billion, as semiconductor makers responded to increased first-half demand for chips used in electronics such as flat-panel displays, MP3 players and digital cameras.

Net profit may gain only 0.9 per cent to about HK$1.16 billion this year amid flat growth in sales, Bank of China International has forecast.

Demand weakened in the second half amid falling global sales of electronic goods. Mr Lee expected the semiconductor industry to grow 9 per cent to 11 per cent this year.

The company planned to maintain its relationship with parent ASM International despite a suggestion by an investor of the Netherlands-based firm that the ties should be severed.

Mellon HBV, owner of 8 per cent of ASMI, last year suggested that ASMI should make its 54 per cent-owned ASM Pacific financially independent and stop using dividends from the subsidiary to invest in its unprofitable operations.

The proposal was voted down by 65 per cent of shareholders in November.

'The proposal was only made by a minority investor last year but has already been rejected in an extraordinary general meeting of ASMI in November,' Mr Lee said.

'Keeping the current relationship between ASMI and us is good for both of our future developments. We also do not have a plan to spin off any division, nor do we have any merger and acquisition plans, as internal growth is good enough.'

ASMI, Europe's second-largest semiconductor equipment maker, said its net profit rose 32 per cent to US$45.3 million last year, despite a loss of US$26.9 million from discontinued operations such as its copper metallisation business.

ASM Pacific paid US$136 million, or 90.9 per cent of earnings per share, as dividend last year, compared with US$86 million or 89 per cent of earnings per share a year ago.

It planned a US$30 million capital expenditure this year, up from US$26.6 million last year, Mr Lee said.

The company ranked No1 in the global semiconductor equipment market with a 15 per cent market share, followed by Japanese producer Shinkawa with 9.4 per cent and United States-based K&S with 8.6 per cent.

ASM Pacific shares closed 3.36 per cent lower at HK$48.85 yesterday.