Weak sales, tax burden weigh on ASM Pacific

PUBLISHED : Thursday, 03 May, 2007, 12:00am
UPDATED : Thursday, 03 May, 2007, 12:00am

ASM Pacific Technology, the world's largest supplier of semiconductor assembly equipment by revenue, said first-quarter net profit fell 32 per cent because of weak global demand and a heavier tax burden.

Profit fell to HK$191.8 million in the first three months this year from HK$282.2 million a year ago, while sales dropped 7.8 per cent to HK$961.6 million. Gross margin decreased to 40.8 per cent from 45.7 per cent.

'The reduction in first-quarter sales was not unexpected,' chief executive Lee Wai-kwong said. 'The slowing trend seen in the second half of last year is showing signs of reversing due to promising order inflows during the first quarter of 2007.'

Mr Lee said the improvement in order inflows had covered most of the company's products. However, it was too early to conclude the forecast market recovery had already started.

'We are cautiously optimistic about the rest of the year if the trend remains positive,' Mr Lee said.

ASM Pacific's order backlog amounted to US$130 million at the end of March, about the same as the first quarter of last year, or 25.4 per cent up from the previous quarter.

Equipment revenue fell 6.1 per cent in the quarter to HK$767 million.

Research and development expenses rose 6 per cent to HK$67.9 million while tax expense surged 38 per cent to HK$24.4 million. The company had HK$988 million cash on hand at the end of March.

ASM Pacific shares rose 1.41 per cent to close at HK$50.30 before the results announcement yesterday.