29th Aug 2018 10:47
LONDON (Alliance News) - IQE PLC on Wednesday said its profit grew in the first-half of 2018 as revenue increased by 19% and it lowered its investments in new products.
The semiconductor company said reported pretax profit for the six months to the end of June rose 18% to GBP6.6 million from GBP5.6 million reported for the same period a year earlier, as revenue grew by 4.0% to GBP73.4 million from GBP70.6 million.
Adjusted pretax profit declined 22%, however, to GBP7.6 million from GBP9.7 million the year before.
IQE said currency headwind, accelerated customer qualification programmes and Newport wafer foundry pre-production costs resulted in a decline in adjusted profit in the first half of 2018.
Excluding these factors, adjusted pretax profit would have increased by 14% to GBP11.1 million, the company said.
IQE reduced its investments in product development to GBP13.0 million from GBP15.4 million. These costs include GBP6.3 million of property plant and equipment development associated with the new Newport foundry in Wales.
The company booked pre-production costs of GBP900,000 on recruitment, increased headcount and training to support and deliver the operations team of the Newport foundry. The foundry provides manufacturing services for automotive, medical, industrial, consumer, and telecom markets.
During the period IQE installed five reactors at the foundry with further two fitted in August.
Looking forward, the company said it plans to fit a total of ten reactors by the end of the second half of 2018.
"Each of our business sectors delivered strong top line growth at constant currency during the first half," said Chief Executive Drew Nelson.
"IQE has taken the opportunity during the first half of 2018 to accelerate and expand its qualification activities for the fast growing vertical-cavity surface-emitting laser market for consumer applications," added Nelson.
Shares in IQE were trading 0.9% lower on Wednesday at 103.10 pence each.
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