AYALA-LED Integrated Microelectronics Inc. (IMI) said its growth next year could be weaker partly as a result of global uncertainty but a company official said it can still go higher than the industry’s.
IMI President Arthur Tan told reporters that it is enjoying a higher growth this year, so far, but only as a result of a “very weak year” in 2013 and its growth rate this year may not be replicated by 2015.
“On a growth basis, I think we can still be better than the industry but I don’t think [we can do this again next year] and the whole world was just coming out of its shell,” Tan said on Tuesday night at the sidelines of the company’s investors’ briefing for its P2.25-billion maiden share offer.
Tan, however, said it can become a $1-billion company in three years as it grows the various sectors that it operate in.
He said part of its strategy is to go to other markets that could contribute to its growth, while expanding its current businesses.
“We are already embedded in the markets that we want, now we can start focusing and expanding into some other markets like medical. We are already in medical but we can start focusing more on that in order to make it bigger,” he said.
In the automotive electronics, where IMI has a presence, the market has seen a compounded growth rate of 7.3 percent and is expected to reach $314 billion by 2020, driven in large by government and automaker safety initiatives.
The industrial electronics market is expected to reach $321 billion by 2018.
Tan said the company is not losing focus on an earlier target of being a $10-billion company by 2020. “It’s still a long-term goal. But our main focus is on a near term basis, our near team goal. It’s still a possibility, but it’s not cast in stone,” Tan said.
IMI is set to sell to the public some 300 million shares, divided into 215 million as its initial offer, and another 85 million shares as an overallotment option. It will be sold at a price of P7.50 per share.
The company reported a net income of $20.95 million, or a growth of more than five times from last year’s profit of $4.05 million. The company’s communication and automotive businesses contributed 70 percent of its increase in revenues of $650 million for the first nine months of the year from last year’s $547.1 million, or an increase of 19 percent.
IMI is set to raise as much as P2.25-billion share offer of 300 million shares at P7.50 apiece. The offer started on Monday and ends on Friday, with listing of the shares eyed by December 5. The share sale will bring the company’s public float to 24 percent. The company will be expanding some of its facilities overseas, particularly that in Bulgaria, to further expand capacity.
“Some of our sites, although our average utilization rate is at 70 percent, there are factories or sites that are already about 98 percent utilized so we need to fix that. The one that I know on top of my head is the one in Bulgaria, so I need to expand it,” Tan said. Tan said IMI normally spends between $20 million and $30 million as capital expenditures in a year, but the fund raising activity will improve the company’s capabilities in expanding “into specific verticals and look at some acquisitions for technology.”