Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Integrated Micro-Electronics Inc (PHS:IMI, Financial) is experiencing a recovery in the supply chain, with lead times returning to normal levels, reducing the need for expedited shipping.
- The company's geographical footprint positions it strategically to benefit from shifts in global trade dynamics, particularly with potential increases in business in Mexico.
- IMI's automotive segment is seeing growth in its Serbia operations, which increased by 79% over the same period.
- The company is focusing on optimizing its manufacturing and office footprints to align with market requirements, potentially improving efficiency and margins.
- IMI has successfully reduced its debt by $35 million while maintaining a stable cash position, indicating strong financial management.
Negative Points
- The automotive segment experienced a 6.6% decline due to non-core business impacts and deferred programs.
- Persistent high interest rates have slowed down customer purchasing of new vehicles, affecting the automotive market.
- The industrial market is facing challenges due to inflated inventory levels from previous panic buying during the component shortage.
- IMI's operations in Mexico have been unprofitable, and the company is considering strategic decisions to address this issue.
- The company is experiencing a slowdown in the EV market, with some programs being deferred, impacting growth prospects.
Q & A Highlights
Q: Can you provide more details about the situation in Mexico and the company's plans there?
A: Louis Hughes, CEO: Our situation in Mexico has been challenging, with ongoing losses. We need to decide quickly on our future there as the company cannot sustain these losses. We are committed to taking decisive action in the best interest of our investors.
Q: Can we expect positive net income for the third quarter?
A: Alexis Brian Jalijali, Investor Relations Officer: We do not provide specific guidance, but improvements in margins are anticipated due to positive steps taken by new management. While we can't specify when, we are optimistic about the actions being taken.
Q: Is the worst over for IMI?
A: Louis Hughes, CEO: It's too early to tell. While there is optimism about the company's prospects, significant work remains. We have great customers and a strong footprint, and we aim to empower our team to achieve positive results in the future.
Q: With the slowdown in the EV market, will IMI continue to focus on this segment?
A: Louis Hughes, CEO: We aim for balance and diversity in our market focus. While we won't exit the EV market, we will balance our business across automotive and industrial sectors. We will be intentional about the customer programs we pursue.
Q: Does IMI favor a Republican or Democratic win in the US elections?
A: Louis Hughes, CEO: We believe IMI can benefit either way. A Democratic win might lead to geopolitical risks, prompting supply chain diversification, while a Republican win could result in increased tariffs, benefiting our footprint in the Philippines.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
