ST Assembly posts higher Q4 profit, CFO exits
By Jennifer Tan
Thursday January 29, 11:49 AM
SINGAPORE, Jan 29 (Reuters) - ST Assembly Test Services Ltd, the world's fifth-largest tester of microchips, on Thursday posted a stronger fourth-quarter profit thanks to robust wireless demand, and forecast a five percent rise in first-quarter sales.
Singapore-based ST Assembly said it expected its 2004 revenues to expand faster than the average growth rate of 20 percent forecast for the global semiconductor sector, but it declined to specify a number.
Deutsche Morgan Grenfell Securities analyst Pu Weidong, who has a "hold" on ST Assembly shares, said he has raised his 2004 net profit estimate by three percent to US$38.5 million. He expects the company's earnings to surge 31 percent in 2005.
The state-controlled firm reported a fourth-quarter net profit of $7.8 million, or seven cents per American Depositary Share (ADS), compared with a net loss of $23.6 million in the year-earlier quarter and S$800,000 in the September quarter.
This was better than the average net profit of $4.6 million forecast by four analysts polled by Reuters.
The profit for the October-to-December quarter was the company's second in succession after 10 straight quarters in the red.
Separately, ST Assembly said Chief Financial Officer Dov Oshri had resigned after only five months in the job, citing personal reasons. Vice President for Finance Pearlyne Wang will assume Oshri's responsibilities until a replacement is identified, it said.
"The fourth quarter closed a very good year for ST Assembly, marked by broad-based growth across all of the end-markets that we serve, improved (factory) utilisation and higher profitability," Chief Executive Tan Lay Koon told analysts in a conference call.
Tan added that the broadband, wireless-handset, networking and digital consumer markets had enjoyed strong demand. The company derived 65 percent of sales from communications.
Shares of ST Assembly bucked the broader market downtrend on Thursday morning to rise 0.4 percent to S$2.30. The stock has surged over 84 percent in 2003 in anticipation of the recovery in the chip cycle.
OUTPACING INDUSRY GROWTH
ST reported fourth-quarter revenues of $119.6 million, up 66 percent from the same quarter a year earlier and 22 percent from the third quarter, which were the highest in its history.
ST Assembly, whose customers include the world's largest contract microchip maker, Taiwan Semiconductor Manufacturing Co Ltd , and fourth-ranked Chartered Semiconductor Manufacturing Ltd , had said in October that it was expecting December-quarter sales to rise five to 10 percent.
For the full year, ST Assembly said its net loss had shrunk to $1.7 million from a $89.3 million loss in 2002, while revenues surged 69 percent to $380.7 million from the previous year.
Looking ahead, Tan said the company had historically grown faster than the chip industry. "Twenty percent is the overall growth (for the industry for 2004). We are growing faster, so it has to be more than 20 percent. But how much more? We're not prepared at this point to commit to a full-year number," Tan said, referring to the company's revenues.
ST Assembly said it had set aside $200 million to $250 million for capital expenditure in 2004 to purchase next-generation testers, expand production plants in Singapore, Taiwan and China and to invest in advanced packaging technology.
The company, which raised $230 million through a stock and convertible bond offering in October, had cash and cash equivalents of $347.6 million as at end-December. (Additional reporting by Eric Auchard) |
