Pampanga—(PHStocks)—Phoenix Semiconductor Philippines Corp. (PSE: PSPC) has reported that its net income after tax in 2015 totaled $13.46 million, down from the $17.45 million posted the previous year.
The decline was attributed to the 10 percent drop in revenues of $208.86 million from the $233.33 million due to lower production volumes and demand from Samsung Electronics of Korea, particularly in the second half of 2015.
“The global semiconductor industry was affected by the downturn in the China economy and excess inventory levels in the memory segment of the semiconductor industry,” said Kyuho Han, Director and Treasurer. He explained that the sudden slump in demand for PC and other computing products resulting from the China economic slowdown has led to weaker selling prices for memory devices which further exacerbated the profit decline.
In spite of the decline in profits, earnings before income, taxes, depreciation and allowances (EBITDA) decreased at slower pace of 8.57% to $39.25 million in 2015 from the $42.93 million the previous year. The company benefited from the decrease in finance cost to $4.04 million from $5.15 million as a result of settlement of a principal loan with its creditor bank during the year.
Total assets stood at $180.00 million as of December 31, 2015, lower than the $199.52 million as 2014, due to the decline in retained earnings. Stockholders’ equity amounted to $99.92, translating to a return on equity (ROE) of 14% for the year.
“PSPC’s financials remains sound as evidenced by positive liquidity and the continued healthy operational efficiencies in 2015,” Han pointed out. He added that the semiconductor industry is characterized by cyclical movements, and the Company is financially strong to cope with the industry fluctuations.
PSPC has an exclusive supply chain partnership with Samsung, a global leader in consumer electronics and the world’s second largest semiconductor company. Han expressed confidence that its Business Transaction Agreement with Samsung Electronics will be renewed within the year. The company is only one of five outsourced semiconductor assembly and test (OSAT) providers in the world that has a long-term supply chain contract with Samsung.
The current weakness in the global economy due to the China slowdown is expected to ease and reverse in the second semester of 2016. The economic recovery, Han said, will benefit PSPC as its fundamentals remain intact and that its current Phase 1 manufacturing plant can absorb increased demand in the short-term.