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Okmetic Oyj Okmetic is a technology company that supplies customised silicon wafers for the sensor and semiconductor industries and sells its technological expertise. During the period under review, Okmetic's net sales amounted to 34.0 million euro (32.9 million euro). Profit for the period was 4.1 million euro (2.6 million euro). Earnings per share amounted to 0.24 euro (0.16 euro).
REVIEW IN BRIEF
- Net sales amounted to 34.0 million euro (32.9 million euro). - Profit for the period amounted to 4.1 million euro (2.6 million euro). - Earnings per share amounted to 0.24 euro (0.16 euro). - The equity ratio strengthened, amounting to 60.1 percent (56.8%). - Periodic revenue from technology sales causes significant variations in the interim results. - Net sales for the whole financial year of 2008 are expected to amount to just over 68 million euro and operating profit is expected to account for around 13 percent of net sales.
Net sales 34,025 32,935 64,652 63,694 49,822 Operating profit 5,279 3,339 7,121 9,877 580 % of net sales 15.5 10.1 11.0 15.5 1.2 Earnings per share, euro 0.24 0.16 0.31 0.41 -0.10 Net cash from operating 5,776 1,213 8,305 17,945 3,125 activities Return on equity, % 17.6 12.8 12.4 18.6 -5.1 Gearing, % 13.2 35.8 19.6 31.3 99.5 Equity ratio, % 60.1 56.8 55.3 51.1 41.1 Average number of personnel during the 361 361 362 360 359 period
PROJECTIONS FOR THE NEAR FUTURE
Okmetic supplies sensor wafers for a variety of applications. Within the automotive industry, which represents the biggest market for microsensors, the most significant growth potential can be found in angular rate sensors which are used in driving systems. New, rapidly growing consumer electronics applications include, for example, microphones based on MEMS sensor technology. Altogether, the microsensor industry is expected to grow at a rate of more than ten percent per year both in the short term and in the long term (Yole, IC Insights).
The moderate market situation within the semiconductor industry is expected to continue. The annual growth estimates have been revised somewhat during the summer, and the new, slightly higher estimates now predict an annual growth of around 5 - 10 percent (IC Insights, Future Horizon, Gartner, SIA).
Demand for silicon wafers grows hand in hand with the needs of the customer industries. According to prevailing industry forecasts, the total volume of wafer shipments is expected to grow by 5 - 10 percent in 2008, thanks to the growing demand for 300 mm wafers. The annual growth of demand for wafers with diameters of 100 - 200 mm, which are important to Okmetic, is expected to fall short of the overall development trend.
Okmetic's order book for the rest of the year looks strong. Net sales for the whole financial year of 2008 are expected to amount to just over 68 million euro and operating profit is expected to account for around 13 percent of net sales.
MARKETS
Demand for micro-mechanical sensors has continued its steady growth during the first half of the year. The fastest growth rates have been recorded in consumer applications. The automotive industry continues to adopt more and more sensor solutions all the time.
Within the semiconductor industry, the market situation remained moderate throughout the first half of the year. Between January and May, semiconductor sales grew by five percent compared to the corresponding period of the previous year (WSTS, SIA). At the same time, semiconductor component shipments increased by almost ten percent.
The growth in the demand for silicon wafers follows the shipment volumes of the customer industries, and consequently the first half of the year saw the demand grow by almost ten percent compared to the first half of last year. The growth trend was most prominent in large wafer sizes. Demand for the wafer sizes that Okmetic manufactures has remained stable.
SALES
The group's net sales amounted to 34.0 million euro (32.9 million euro).
Net sales per customer segment
2008 (2007) from beginning of year (on average) Sensors 35% (34%) Semiconductors 39% (56%) Technology 26% (10%)
Technology sales encompass not just the sale of Okmetic's technological expertise but also crystals and occasionally raw materials and surplus produce. The fact that revenues from transferring manufacturing expertise are recorded in several instalments and also the significant periodic fluctuation in other technology sales cause significant variation in the percentage of net sales that technology sales represent periodically, both in terms of different customer segments and different market areas. Revenue from technology sales has been high during the first half of the current year.
Okmetic's sales to the sensor market increased and developed on target. Sensor wafers are used in the automotive, aviation and medical industries, for example, as well as in consumer applications. As a sensor wafer supplier, Okmetic is the global market leader.
Sales of semiconductor wafers decreased slightly due to the market situation. Typically, semiconductor wafers are used in consumer electronics as well as in telecommunications and automotive applications. A slump could be detected in the demand for semiconductor wafers during the first half of the year.
Net sales per market area
2008 (2007) from beginning of year (on average) North America 38% (48%) Europe 39% (32%) Asia 23% (20%)
The exchange rate fluctuations of the main currencies of each market area affect the relative shares of different market areas considerably.
PROFIT
Okmetic group's profit was 4.1 million euro (2.6 million euro). Earnings per share amounted to 0.24 euro (0.16 euro). The group's hedging efforts generated a profit of 0.7 million euro during the period under review. Periodic revenue from technology sales causes significant variations in the interim results. Revenues from technology sales affect the figures for the first half of 2008 considerably.
FINANCING AND INVESTMENTS
The group's financial situation is good. Net cash flow from operating activities amounted to 5.8 million euro (1.2 million euro). The value added tax liabilities and receivables resulting from an internal business acquisition that was concluded in Finland at the turn of the year have been paid. In April, the company distributed a dividend of 31.8 percent, i.e. 1.7 million euro, of the profit accrued in 2007, representing a 0.10 euro dividend per share.
The group's capital expenditure amounted to 1.2 million euro.
At the end of the period, cash and cash equivalents amounted to 13.1 million euro (8.2 million euro). Return on equity amounted to 17.6 percent (12.8%). The group's equity ratio strengthened, amounting to 60.1 percent (56.8%). Equity per share amounted to 2.79 euro (2.49 euro).
PRODUCT DEVELOPMENT
Product development accounted for 3.1 percent (2.9%) of Okmetic's net sales.
PERSONNEL
The average number of employees at Okmetic was 361 (361). At the end of the period, 320 of these were located in Finland, 47 in the US and three in Japan.
BUSINESS RISKS
The majority of Okmetic's sales are concluded in US dollars and a relatively small proportion in Japanese yen. Both currencies have weakened significantly since the beginning of the year. Despite hedging, the company remains vulnerable to exchange rate fluctuations.
The semiconductor market is cyclical by nature. The market's cyclical nature is currently affecting the demand for semiconductor wafers negatively.
Okmetic Oyj has a 13.7-percent shareholding in a Swedish company, Norstel AB, which is currently under development. The holding involves a business risk associated with developing enterprises. The change in the value of the holding has been translated into a change in equity.
SHARE PRICE DEVELOPMENT, TRADING AND NOTIFICATIONS
A total of 3.9 million shares (8.4 million shares) were traded between 1 January and 30 June 2008, representing 23.1 percent (50.0%) of the share total of 16.9 million. The lowest quotation of the period was 2.20 euro (3.34 euro) and the highest was 3.14 euro per share (4.67 euro), with an average of 2.63 euro (4.06 euro). The closing quotation of the period was 2.55 euro (4.40 euro). The market capitalisation of Okmetic's shares amounted to 43.1 million euro (74.3 million euro) at the end of the period.
After the period under review, Accendo Capital SICAV investment fund (Luxembourg) increased its holding of Okmetic's shares and voting rights on 14 July 2008 to 1,052,988 shares, which represents 6.24 percent of the company's share capital.
OWN SHARES
The company has not repurchased its own shares and the board of directors has not been authorised to repurchase or convey the company's own shares.
OPTIONS
The company has no options in issue at the moment.
BOARD OF DIRECTORS' AUTHORISATION TO INCREASE SHARE CAPITAL
The annual general meeting held on 3 April 2008 authorised the board of directors to decide on new issues, options and other share entitlements according to the first paragraph of section 10 of the Finnish Companies Act. The aggregate number of shares issued on the basis of the authorisation may not exceed 3,377,500 shares, which represents approximately 20 percent of all the shares of the company. The board of directors is authorised to decide on all the terms and conditions concerning the issue of shares, options and other share entitlements. Issuance of shares, options and other share entitlements can be carried out as a directed issue. The authorisation is effective until the following annual general meeting of shareholders.
Vantaa, 7 August 2008
Board of directors
For further information, please contact:
President Antti Rasilo, Okmetic Oyj, tel. +358 40 746 1351, email: antti.rasilo@okmetic.com
OMX Nordic Exchange Principal media www.okmetic.com
OKMETIC IN BRIEF
Take it higher
Okmetic is a technology company which supplies tailor-made silicon wafers for sensor and semiconductor industries and sells its technological expertise. Okmetic provides its customers with solutions that boost their competitiveness and profitability.
Okmetic's silicon wafers are part of a further processing chain that produces end products that improve human interaction and quality of life. Okmetic's products are based on high-tech expertise that generates added value for customers, innovative product development and an extremely efficient production process.
Okmetic has a global customer base and sales network, production plants in Finland and the US and contract manufacturers in Japan and China.
Okmetic's shares are listed on OMX Nordic Exchange under the code OKM1V. For more information on the company, please visit our website at www.okmetic.com.
The entire interim report including tables can be downloaded from the link below.
