RE: GedW's Hottie Hotties.15 Jul 2010 18:44
[IQE]
As a result of stronger than expected wireless product sales and increasing demand for optoelectronic and silicon-based wafers, the Board expects first-half performance to be significantly ahead of market expectations.
The Group expects to report first-half revenues of at least £32.8 million, EBITDA above £5.3 million and retained profit of more than £2 million. Compared with the first half of 2009, this represents revenue growth of over 50% with EBITDA up over 178%, illustrating the Group's powerful operational leverage.
First-half growth was driven by good recovery in the wireless market with particularly strong demand for smartphones. The Group achieved higher than expected sales in the normally weak first quarter with demand accelerating in Q2 and looking robust for the remainder of the year.
Demand increased strongly for optoelectronic products, in particular IQE's world-leading Vertical Cavity Surface Emitting Laser (VCSEL) technology, which the Board believes will soon play a key enabling role in a number of high volume consumer applications. Notable applications of VCSEL technology include finger navigation, optical heating, internal interconnectors and external optical connectors such as Active Optical Cables and Intel's Light Peak technology, which will provide data transfer speeds 10-200 times faster than existing connectors such as USB cables.
In addition, demand continues to grow strongly for wafers to create energy-efficient products such as Concentrator PhotoVoltaics based on compound semiconductors and light emitting devices based on Gallium Nitride, with notable milestones achieved in bringing both these products to mass markets.
First-half performance was also boosted by a return to growth for the Group's silicon-based epitaxy services for high-performance electronic products, with a high level of interest in new products such as germanium on insulator (GeOI), launched in 2009, and Silicon on Sapphire (SOS).
The outlook for the second half remains positive with the Board expecting continued strength in sales volumes driven by increasing demand for smartphones and high-speed wireless technology, as well as for consumer optoelectronic devices. Demand-driven growth is being reinforced by an increasing trend towards outsourcing across all the market sectors in which the Group operates.