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AFTER
reporting forex losses, Integrated Microelectronics Inc.
(IMI), the manufacturing arm of the Ayala group, is
exploring potential expansion in Europe and North
America.
A
company source said there is a good number of existing
and potential customers that suppliers with onshore,
near-shore and Asian operations can take advantage of.
The source did not say though which specific areas the
company is considering.
IMI
currently serves customers in Japan and the US in the
optical and hard-disk drive, communications, industrial,
consumer and automotive electronics sectors. It has
manufacturing facilities in Laguna and Cebu; design
centers in Manila and in Tustin, California; and a
support center in Singapore.
In the
second half, IMI will launch an equity call to raise
additional capital for this expansion program.
Ayala
Corp., which owns 68 percent of the company, said it is
evaluating a variety of opportunities to expand its
geographic footprint and enhance its capabilities
organically or through acquisitions.
In an
earlier interview, Ayala Corp. chief financial officer
Rufino Luis Manotok said IMI is looking to raise
“slightly more than a billion pesos” in equity to fund
its expansion overseas, “probably in
North America
and Europe, where there are a lot of electronic
companies it can service.”
In his
statement, Ayala chairman Jaime Zobel de Ayala said: “We
are prepared to subscribe to more than our proportionate
share in the equity call as part of our desire to
support the company in its growth initiatives
irrespective of the unfortunate currency position loss,”
said
Year-
to-date, IMI booked $23.2 million in realized losses
after it hedged its peso expenses in 2007, when the
local currency was appreciating against the US dollar.
The peso
was Asia’s best performing currency last year, gaining
19 percent against the greenback. However, at the start
of 2008, the peso reversed its momentum.
IMI,
whose functional currency is the dollar, has estimated
further market-to-market losses of $10.3-million arising
from existing hedging contracts.
“The
change in the macroeconomic environment and the peso
volatility has unfortunately affected the hedging
position made by the IMI. This is an unfortunate turn of
events but we believe that this step helps put an end to
any risk exposure the company faces from its past
position,” Zobel explained.
IMI has
agreed to put in place a short-term program to correct
such position by the end of the month. It will also
terminate some of its contracts with foreign banks and
enter into a new set of contracts to cover its peso
operating expenses.
The
company’s revenues grew 15 percent in the first five
months of 2008 compared with the same period last year
on the back of increases in sales volume and average
selling prices to key customers. Excluding the hedging
losses, IMI’s net income as of May 2008 improved 48
percent year-on-year.
If the
peso continues to depreciate until the end of the year,
IMI’s profitability is expected to improve further,
partially offsetting the hedging losses. IMI’s balance
sheet is strong with total assets of $325 million and
total debt of only $67 million as of May 31, 2008.
IMI is a
regional electronics manufacturing services provider
that offers flexible solutions such as design and
product development, process and product engineering,
test development, logistics and manufacturing solutions
for the computing, communications, consumer, automotive,
industrial, and medical electronics industries. |
