Hana Microelectronics 2Q 2016 Revenue Down 7%

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Thailand-based EMS firm Hana Microelectronics Group has reported sales revenue of THB 4.8 billion for the second quarter of 2016, down by 7% compared to the same period last year. In USD terms, sales revenue decreased by 12% to $135 million. Meanwhile, operating profits decreased to THB374 million in Q2 2016, down by 5% from THB394 million in Q2 2015.

Year-on-year, the microelectronics divisions sales decreased by 21% in USD terms. Sales in Lamphun decreased by 24% due to a drop in high material content sales and computer products, while JiaXing decreased by 21%. The IC division’s USD sales revenues decreased by 1% in 2Q 2016, with revenues of the IC divisions in Ayutthaya increasing by 8% and JiaXing decreasing by 23%. The microdisplay/RFID operation in Ohio reported an increase of 276% in sales revenue.

Group sales increased quarter on quarter by 1% from $133 million in 1Q 2016 to $135 million in 2Q 2016. Sales in the microelectronics division decreased by 3%, with Lamphun decreasing 7% and JiaXing increasing 7%. Sales revenues from the IC divisions were 3% higher in 2Q 2016 with Ayutthaya sales increasing by 4% and JiaXing IC sales increasing by 3%. The microdisplay division sales increased by 67% in 2Q 2016 compared to 1Q 2016. In THB equivalent, the group sales were similar in 2Q 2016 compared to 1Q 2016. The average THB/USD exchange rate was 1% stronger at 35.3 in 2Q 2016 from 35.7 in 1Q 2016.

The gross profit margin was 12% in 2Q 2016 similar to 2Q 2015 at 12% due to lower material costs (2%) offset by higher depreciation (-1%) and higher salary expenses (-1%).

Year-on-year operating profits were 5% lower at THB374 million in 2Q 2016 compared to THB 394m in Q215. The Operating margin was 8% in 2Q 2016 similar to 2Q 2015 due to lower sales revenue (1%) offset by lower SGA costs. SG&A expenses were 3% lower in 2Q 2016 than in 2Q 2015. SG&A expenses in 2Q 2016 were 18% lower than 1Q 2016 due to the increased doubtful debts provision in 1Q 2016 reversed in 2Q 2016.