Aixtron Results Reflect Global Downturn
Aixtron, the leading provider of deposition equipment to the semiconductor industry and an important producer of the technology required in the manufacture of carbon nanotubes, nanofibers and graphene, has announced its first quarter results and forecast for 2012.
A difficult financial climate has produced subdued Q1 revenues of EUR 42.0m and a correspondingly negative EBIT of EUR -18.3million. However, the latest announcement reiterates the company’s focus on delivering further improvements to existing products and services and on accelerating specific strategic R&D investments aimed at developing new products for future market opportunities. For the full year 2012, Management reiterated the target of remaining EBIT profitable.
Financial highlights from the report suggest a large downturn in orders has affected profitability, with gross profits down by 90% on the previous year.
With the considerable reduction in order intake during the second half of 2011, in line with expectations Q1/2012 revenues came in at EUR 42.0m for the quarter, 80% down on the EUR 205.4m a year before, and 70% lower sequentially (Q4/2011: EUR 140.1m). Gross profit decreased by 90% compared to the previous year from EUR 104.2m to EUR 10.3m and 13% sequentially (Q4/2011: EUR 11.8m).
Consequently, and as already predicted by Management in Q4/2011, Q1/2012 finished EBIT negative at EUR -18.3m, compared to EUR 74.9m in Q1/2011 and EUR -16.9m in Q4/2011.
The consolidated net result of the AIXTRON Group came in at EUR -12.3m for Q1/2012 (Q1/2011: EUR 52.3m; Q4/2011: EUR -10.9m).
Heavily influenced by fragile consumer confidence, credit tightness, reduced subsidies and ongoing customer overcapacity, the Company’s order intake visibility remains limited. The Q1/2012 order intake of EUR 31.5m was sequentially broadly in line with the Q4/2011 level of EUR 29.3m (Q1/2011: EUR 210.3m) which suggest that the current order levels may represent the trough level of the current cycle.
Despite the current market conditions, AIXTRON Management contiues to be convinced that the development of a sustainable LED lighting industry will follow this uncertain transitory period. Set against this difficult environment, the Company remains focused on delivering further improvements to existing products and services and on accelerating specific strategic R&D investments focused on developing new products for future market opportunities. This strong R&D focus is reflected in the 32% year on year increase in R&D costs of EUR 16.4m in Q1/2012 (Q1/2011: EUR 12.4m) and the 12% sequential increase compared to the prior quarter (Q4/2011: EUR 14.6m), and additionally in the increased average number of 325 R&D employees in Q1/2012 compared to 316 in Q4/2011 and 252 in Q1/2011.
Despite these disappointing results the company chairman remains optimistic about the future and expects the resilience built into the company will help to buffer it during the tough economic downturn. An enhanced product portfolio will also help to ensure that the company continues to take the lead within the industry. Continued effort in the area of research and development is intended to ensure that Aixtron will be able to capitalise on any future improvements in the global market situation.
Aixtron shares were up 5.74% at time of writing, suggesting that despite the news of disappointing results the company still remains a company worth investigating.
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