INTEGRATED Micro-Electronics, Inc. (IMI) expects a $5-million boost to its net income as a result of its global restructuring, the company said on Wednesday.
“The office restructuring efforts in the four locations (United States, Japan, Singapore, and Malaysia) are part of the company’s initiatives to align the cost structure with the current business needs and are not expected to disrupt the company’s operations. These activities will yield annual cost savings of approximately $5 million, improving net income,” IMI said in a regulatory filing.
On Tuesday, IMI said it would close its Japan sales office. It is also currently downsizing its Singapore and Malaysia offices to improve margins.
The company also said that IMI USA would stop prototyping and manufacturing activities by yearend. The production functions of IMI USA will be transitioned to IMI facilities across North America, Europe, and Asia.
“The cessation of prototyping and manufacturing activities in IMI USA will have a minimal effect on IMI group’s revenue since it is only approximately 0.30% of the total IMI group revenues,” IMI said.
IMI USA will also channel prototyping needs of selected customers to California-based XLR8 Corp. as part of a new agreement. In turn, XLR8 will transition mass production projects to IMI as its preferred manufacturing partner.
For the first half, IMI trimmed its attributable net loss by 89.5% to $8.77 million from $83.66 million last year on “cost rationalization activities.”
January-to-June revenue dropped by 18% to $565.8 million from $691.89 million last year, partly attributed to the divestment of British subsidiary STI Enterprises Ltd., which was still part of the group in early 2023.
“Market softness in the industrial sector has affected IMI’s Philippine operations, with reduced demand from end markets delaying launches of new models as customers continue to trim down existing inventory levels,” IMI said.
“In response, IMI continues to optimize its customer portfolio by reducing involvement in lower-margin projects, aiming to enhance profitability and focus on higher-value opportunities within its pipeline,” it added.
IMI is a global electronics manufacturing solutions expert specializing in highly reliable and quality electronics for long product life-cycle segments in the automotive, industrial, power electronics, communications, and medical industries.
On Wednesday, IMI shares fell 4.92% or nine centavos to P1.74 per share. — Revin Mikhael D. Ochave
