AEM Holdings Ups 2H2024 Guidance Amidst Strong Customer Demand

Key Highlights:

• AEM Holdings Ltd. reports 3Q2024 revenue of S\$74.2 million, a 6.5% decrease from 2Q2024.
• Profit before tax, excluding exceptional items, rises by 3.5% from 2Q2024 to S\$0.9 million.
• The company revises its 2H2024 guidance upwards to S\$190 million to S\$210 million, from the previous range of S\$160 million to S\$180 million.
• Commercialization of the expanded AMPS platform featuring advanced automated burn-in and System Level Test (SLT) capabilities.

Singapore, 12 November 2024 – AEM Holdings Ltd. (AEM), a global leader in test innovation, has released its voluntary business update for the third quarter of 2024, highlighting a mixed bag of results but notable progress in profitability and operational efficiency.

Financial Overview

For the third quarter of 2024, AEM reported a revenue of S\$74.2 million, reflecting a 6.5% decline from the previous quarter. Despite this drop in revenue, the company’s profit before tax (excluding exceptional items) saw a 3.5% increase to S\$0.9 million, driven by a favorable product mix and operational agility. The net loss for the quarter was reduced by 39.5% to S\$917,000.

Segment Performance

The Test Cell Solutions (TCS) segment, which accounted for 46.7% of the Group’s revenue, experienced a 16.6% decline to S\$34.7 million due to a reduction in engineering services. Conversely, the Contract Manufacturing (CM) segment, representing 50.8% of revenue, showed a robust 5.3% quarter-on-quarter growth to S\$37.7 million, thanks to an improved inventory situation among industrial customers.

Updated 2H2024 Guidance

Notably, AEM has revised its 2H2024 revenue forecast upwards to a range of S\$190 million to S\$210 million, from the previous guidance of S\$160 million to S\$180 million. This adjustment is attributed to a key customer pulling in systems from FY2025 into 4Q2024 under a non-cancellable, long-dated purchase order program for inventory management purposes.

Strategic Developments

During the quarter, AEM announced the commercialization of its expanded AMPS platform. This platform integrates advanced automated burn-in capabilities with System Level Test (SLT) capabilities, powered by AEM’s proprietary PiXL™ thermal technology. The AMPS platform is expected to be online at the customer’s site by late 2024, providing processor and DRAM manufacturers with extensive test coverage in a cost-effective manner.

Balance Sheet and Financial Position

As of 30 September 2024, AEM’s total equity stood at S\$473.9 million, a slight decline of 0.9% from the previous quarter. The net asset value (NAV) per share also decreased marginally to 149 cents. Despite this, the company maintained a stable capital structure with a debt-to-equity ratio of 0.2x.

Business Outlook

The semiconductor industry continues to experience a dichotomy with AI and high-performance computing maintaining positive momentum, while other segments like smartphones, automotive, and traditional computing face challenges. AEM remains committed to investing in differentiated test capabilities tailored for AI/HPC applications to capitalize on this growth opportunity.

AEM’s CEO, Amy Leong, remarked, “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.”

AEM Holdings Ltd. continues to be a global leader in test innovation, providing comprehensive semiconductor and electronics test solutions. With a global presence and manufacturing plants across several countries, AEM offers its customers a resilient ecosystem of test innovation and support.

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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