IQE Regulatory News (IQE)

9 Jul 2007 07:00

IQE PLC09 July 2007 IQE plc First Half Trading Update IQE plc (AIM: IQE, "IQE", "the Group"), the leading global supplier of advancedsemiconductor wafer products and wafer services to the semiconductor industry,is providing a trading update for the first half ended 30 June 2007. As anticipated at the time of the Group's preliminary results on 28 March 2007,the flat start to trading in January and February has been followed byincreasingly strong trading throughout the remainder of the half year. Monthlyrevenue has increased throughout the period, with the consequence that the Boardanticipates overall revenues for the half year to be slightly above marketforecasts of £22.5m. As a result of the Group's strong operational gearing,EBITDA performance for the half year will be substantially higher than analysts'current forecast of a broadly breakeven EBITDA. This result has been achieveddespite the continued and increasing weakness of the dollar against Sterling. Other key achievements for the half year have been: Both MBE Technology Pte ("MBET") and IQE RF (formally EMD), acquired in 2006,have integrated very well into the Group and have performed ahead of managementexpectations. By gaining exposure to the wireless power amplifier market throughIQE RF, and exposure to the Asia Pacific markets through MBET, the product andcustomer reach of IQE has been substantially enhanced. This is especially truein the global wireless communications marketplace, which now accounts forapproximately 75% of overall Group revenue. Fixed costs within the Group have remained flat during the half year andoperating margins slightly ahead of analysts' forecasts demonstrating thestrength of IQE's business model. The Group ended the half year with positive cash and has strengthened itsfinancial position by putting into place £5 million of overdraft facilities toensure working capital needs do not constrain future growth. Dr Drew Nelson, IQE's Chief Executive, said: "As a result of the acquisitions made during 2006 and strong focus on therapidly growing wireless communications marketplace, IQE has started to deliveron its strategy and expected financial benefits. Demand for our products isbeing fuelled by both the growth in wireless volumes (mobile phones, Wi-Fi,WiMAX, GPS, direct broadcast TV and Bluetooth) and significantly, the continuedtrend to higher speed, feature rich devices. Recent upgrades to the overallhandset market for both 2007 and 2008, the major portion being for high endreplacement phones, bodes well for strongly increasing demand for GalliumArsenide based power amplifier and switch products. "The Board is confident that current strong market conditions and the Group'srobust strategy have positioned the Group to achieve continued growth." IQE expects to announce its half year results to 30 June 2007 on 22 August 2007. Contacts: IQE plc :Drew Nelson, President & Chief Executive Officer +44 (0)29 2083 9400Phillip Rasmussen, Chief Finance OfficerChris Meadows, Investor Relations Executive Noble +44 (0)20 7763 2200John Llewellyn-Lloyd/Matthew Hall College Hill :Adrian Duffield/Ben Way +44 (0)20 7457 2020 NOTE TO EDITORS IQE is the leading global supplier of advanced semiconductor wafers, withproducts that cover the whole spectrum of wafer structures, supported by aninnovative outsourced foundry services portfolio that allows the Group toprovide a 'one stop shop' for the wafer needs of the world's leadingsemiconductor manufacturers. IQE uses advanced crystal growth technology (epitaxy) to manufacture and supplybespoke semiconductor wafers ('epi-wafers') to the major chip manufacturingcompanies, who then use these wafers to make the chips which form the keycomponents of virtually all high technology systems. IQE is unique in being ableto supply wafers using all of the leading crystal growth technology platforms. IQE's products are found in many leading-edge consumer, communication, computingand industrial applications, including a complete range of wafer products forthe wireless industry, such as mobile handsets and wireless infrastructure,Wi-Fi, WiMAX, base stations, GPS, and satellite communications; opticalcommunications, optical storage (CD, DVD), laser optical mouse, laser printers &photocopiers, thermal imagers, leading-edge medical products, barcode, highefficiency LEDs and a variety of advanced silicon based systems. The manufacturers of these chips are increasingly seeking to outsource waferproduction to specialist foundries such as IQE in order to reduce overall wafercosts and accelerate time to market. IQE also provides bespoke R&D services to deliver customised materials forspecific applications and offers specialist technical staff to manufacture tospecification either at its own facilities or on the customer's own sites. TheGroup is also able to leverage its global purchasing volumes to reduce the costof raw materials. In this way IQE's outsourced services, provide compellingbenefits in terms of flexibility and predictability of cost, therebysignificantly reducing operating risk. IQE employs around 320 people and operates six manufacturing facilities locatedin Cardiff (two) and Milton Keynes in the UK; in Bethlehem, Pennsylvania andSomerset, New Jersey in the USA; and Singapore. The Group also has nine salesoffices located in major economic centres worldwide. This information is provided by RNS The company news service from the London Stock Exchange