17th May 2023 18:26
(Alliance News) - IQE PLC on Wednesday launched a fundraise as it reported a more than tripled annual loss and warned current trading is affected by the semiconductor industry downturn.
The Wales-based compound semiconductor wafer product supplier said revenue in the year to December 31 rose 9% to GBP167.5 million from GBP154.1 million.
But its pretax loss widened to GBP75.4 million from GBP22.2 million reflecting a goodwill impairment of GBP62.7 million relating to the wireless operating segment where reductions in sales volumes are forecast to result in lower levels of capacity use and profitability.
Wireless revenue of GBP76.0 million was down 9% from GBP83.2 million on a reported basis reflecting a decline in wireless GaAs epiwafer sales and the impact of the closure of the manufacturing facility in Singapore.
Photonics revenue of GBP88.7 million was 30% higher year-on-year from GBP68.1 million reflecting the continued strength of demand for VCSELs used in 3D sensing.
IQE said current trading is affected by the temporary semiconductor industry downturn, with reduced customer forecasts, orders and associated revenue.
First half revenue is expected to be in the range of GBP50 million to GBP56 million with full year revenue in 2023 in line with management expectations set out in March.
In March, shares in IQE plunged 32% after the firm said a reduction in customer orders and forecasts is expected to result in a year-on-year decline of GBP30 million in revenue for the first half of 2023.
IQE announced a placing to raise up to GBP30 million and a Rex retail offer of up to GBP3 million in order to ensure that the company can continue to invest to execute on its strategy, meet its near-term liquidity requirements and deliver a sustainable balance sheet position going forward.
The group has also entered into an agreement with HSBC to extend the term of its USD35 million revolving credit facility to May 2026, conditional on the completion of the placing. The facility was due to expire in April 2024.
Chief Executive Americo Lemos said: "The fundraising.....will enable us to continue to invest in GaN technologies for these applications, while providing us with the fiscal headroom to navigate the current cyclical downturn."
Shares in IQE closed 1.1% lower at 23.50 pence in London on Wednesday.
By Jeremy Cutler, Alliance News reporter
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