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IQE Global wireless strategy drives IQE to operational profitability


IQE, the leading global supplier of advanced wafer products and services to the semiconductor industry, announces its Interim Results for the half year ended 30 June 2007.

HIGHLIGHTS

  • Revenues up 62% at £23.7m (H1/2006: £14.6m), despite the impact of an adverse USD exchange rate. Revenue up 80% at constant exchange rates to £26.2m.

  • Gross profit up 206% at £3.9m (H1/2006: £1.3m)

  • EBITDA profit £1.3m (H1/2006: EBITDA loss £1.1m before exceptional gain)

  • Operating profit £0.1m (H1/2006 operating loss £1.8m before exceptional gain)

  • Cash generated from operations £0.4m (H1/2006 outflow £3.4m)

  • Net cash outflow £2.8m (H1/2006 outflow £5.1m)

  • Half year cash balance £1.3m (H1/2006 £1.2m)

  • Acquisitions made during 2006 integrated smoothly and contributing strongly

  • Also announced today; a multi-year preferred supplier agreement signed with an existing customer, one of the leading wireless chip manufacturer, expected to be worth at least $50m over first two years – see separate statement

  • Relocating to larger state-of-the-art facility in Singapore to enable significant future capacity expansion in Asia Pacific

  • Major R&D programme secured worth $4m

  • Dr Drew Nelson, IQE Chief Executive, commenting on the results said:

    “Continued strong growth in the global wireless marketplace combined with a shift towards high-end, fully-featured handsets, high speed wi-fi and satellite communications systems, all of which use increasing amounts of our products, have driven revenues ahead of expectations during the first half of the year. This is despite the impact of a slow start in January and February and a weak dollar.

    Our position in the wireless market was substantially bolstered by the two major acquisitions made during 2006. This has positioned IQE as the clear leader in the supply of wafer products to the global wireless communications industry as confirmed by Strategy Analytics. We have also today announced the award of a very substantial, multi-year, preferred supply agreement with one of the world’s largest wireless chip manufacturers, worth in total at least $50 million over the next two years.

    I am extremely pleased to announce the Group’s move into operating profit as a result of the substantially increased revenues and strong operational gearing. This is a key milestone in our continuing progress and clearly demonstrates the strength of the business model. As more customers become cross qualified at our various manufacturing locations worldwide, we will be able to leverage our additional manufacturing capacity, which we expect will result in continued strong growth.”

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