AEM Holdings Reports Q3 2024 Results: Profitability Up, Guidance Revised Upwards

Singapore, 12 November 2024 – AEM Holdings Ltd. (“AEM” or “the Group”), a global leader in test innovation, has released its unaudited financial results for Q3 2024 and the nine months ended 30 September 2024 (9M2024). Despite a 6.5% drop in revenue from Q2 2024, the Group has managed notable profitability improvements and has revised its second-half guidance upwards.

Key Financial Highlights

• Q3 2024 revenue stood at S\$74.2 million, a 6.5% decrease from Q2 2024.
• Profit before tax, excluding exceptional items, was S\$0.9 million, a 3.5% increase from Q2 2024.
• Net loss for Q3 2024 was S\$917,000, a reduction of 39.5% from Q2 2024.
• For the nine months ended 30 September 2024, the Group generated total revenue of S\$247.8 million.
• Revised 2H 2024 guidance to S\$190 million – S\$210 million from previous S\$160 million – S\$180 million.

Operational Efficiency and Segment Performance

The Group’s ongoing efforts to enhance operational efficiency have been fruitful, evidenced by an increase in profit before tax, excluding exceptional items, despite a revenue decline. The Test Cell Solutions (TCS) segment reported a 16.6% quarter-on-quarter revenue decline to S\$34.7 million, primarily due to reduced engineering services for a key customer. Conversely, the Contract Manufacturing (CM) segment saw a 5.3% increase in revenue to S\$37.7 million, driven by better inventory situations and increased demand from industrial customers.

Balance Sheet Overview

• Cash and cash equivalents decreased by 40.4% to S\$47.1 million as of 30 September 2024.
• Inventories slightly increased by 1.9% to S\$334.1 million.
• Total assets were at S\$646.7 million, down 4.1% from the previous quarter.
• Total equity declined marginally by 0.9% to S\$473.9 million.
• Debt-to-equity ratio remained stable at 0.2x.

Strategic Updates and Innovations

One of the most significant developments for the quarter was the commercialization of the expanded AMPS platform. This platform features automated burn-in capabilities along with system-level test (SLT) capabilities, leveraging AEM’s proprietary PiXL^TM thermal technology. The AMPS platform is set to be deployed at customer sites by late 2024.

Leadership and Strategic Direction

The recent appointment of Amy Leong as CEO has led to a review of the Group’s mission and mid-term strategy. The strategy focuses on four key areas:

1. Diversification of customer and market segments.
2. Continued investment in Test 2.0 leadership.
3. Achieving operational excellence.
4. Fostering talent and culture to deliver consistent results.

Business Outlook

The semiconductor industry remains divided, with AI and high-performance computing showing positive trends, while other segments like smartphones and automotive struggle. AEM aims to capitalize on AI opportunities by investing in differentiated test capabilities tailored for AI and HPC applications. The Group remains committed to its mid-term targets through new product deployments and market expansion.

AEM’s CEO, Amy Leong, stated, “During the third quarter, the AEM team made significant strides in both operational performance and profitability. We are inspired by our customers’ enthusiasm for our differentiated new products and remain dedicated to achieving robust growth through continuous innovation, close collaboration with our strategic customers, and an unremitting drive for improved operational efficiency.”

Conclusion

Shareholders should note the upward revision in guidance and the ongoing innovations in AEM’s product platforms, which could positively impact share value. The Group’s strategic focus on AI and HPC applications positions it well for future growth.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors should conduct their own due diligence before making any investment decisions.

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