EPIC members in the News

IQE interim profit up 28%

Continued growth momentum in smartphone market coupled with diversifying opto revenues drive interim profits up 28%;


IQE plc (AIM: IQE, “IQE” or the “Group”), the leading global supplier of advanced wafer products and wafer services to the semiconductor industry, announces its half year results for the six months to 30 June 2011.

FINANCIAL HIGHLIGHTS

• Revenues up 16% to £38.3m (H1 2010: £33.0m)
  
- Constant currency revenue growth of 23% - wireless sales up 21% and optoelectronic sales up 32% (organic 16%)


• EBITDA up 13% to £6.1m (H1 2010: £5.4m)
  


• Pre-tax profit up 28% to £2.8m (H1 2010: £2.2m)
  


• Adjusted EPS* up 18% to 0.71 pence (H1 2010: 0.60 pence)
  


• EPS up 20% to 0.60 pence (H1 2010: 0.50 pence)
  


• Strong cash conversion from operations £5.9m (H1 2010: £1.9m)
  


• Ungeared balance sheet, net funds £1.0m (Dec 2010: £7.0m)
  

BUSINESS HIGHLIGHTS

• Continued strong sales performance in key markets: wireless up 14% and optoelectronics up 25%
  


• Wireless growth driven by continued strong adoption of smartphone and other mobile computing devices
  

- IQE’s products in majority of top-tier smartphones: broad customer base and growing market share (over 30%)
- Engaged in over 20 new significant product qualifications
- Over 100% growth in Gallium Nitride based high power RF business

• Significant growth in opto-electronics:
  

- Significant organic growth driven by emerging technologies, including CPV solar, infrared materials and VCSELs for finger navigation and optical interconnects.
- Infrared materials growth supported by 2010 acquisition of US based Galaxy semiconductors.

• Several patent applications across broad technology range submitted
  

• Continued investment in further production capacity to address growing demand in 2012 and beyond.
  

• Adjusted EPS – EPS before non-cash share based payment charges
  

Dr Drew Nelson, IQE Chief Executive, said:

“The continued growth in demand for our wireless products driven by strong global smartphone adoption, coupled with increased revenues from our optoelectronic wafers have enabled us to maintain our momentum in the first half of 2011 with a diversifying revenue stream.

“Our core wireless markets continue to grow rapidly whilst the new markets around energy efficiency and consumer communications are also developing well.

“The end markets for our products continue to look attractive and offer sustainable high growth. Our overall upbeat outlook is tempered by recent growing uncertainty in the global economy. This has the potential to impact inventory levels downstream in the supply chain or of individual customers although we have not seen any evidence of this at this time. Given IQE’s strategic positioning, the Board remains confident of meeting current market expectations and of the Group’s exciting longer term growth prospects.”

The headline summary of the results is shown below and the full version is available on the IQE website (www.iqep.com).



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