- Gratifying revenue growth due to higher prices and improved product mix
- Further improvement in earnings expected
- IPO plans remain intact
Munich – In the second quarter of 2004, the wafer manufacturer Siltronic AG (Munich) significantly improved its earnings performance for the second time in a row and thus is in line with the plan for the full year 2004. Revenue rose 8.5 % compared to the preceding quarter, based on increased prices for wafers and an improved product mix. While the successful implementation of restructuring measures had a positive effect on costs, expenditures for research and development remained high at 6.8 % of revenue. "Our strategy is paying off. With the opening of the new Freiberg plant we have once again strengthened our position in the high-margin market for 300 mm wafers. In Asia we continue to move forward. We are getting closer and closer to our goal of bringing Siltronic back to profitability,” Dr. Wilhelm Sittenthaler, the Chairman of the Siltronic Executive Board, said on Wednesday in Munich.
Earnings before interest and taxes (EBIT) improved by EUR 19.6 million in the second quarter to minus EUR 9.9 million. Thus they came in significantly higher than prior quarter's earnings (minus EUR 29.5 million). The restructuring measures, including wage and salary concessions, were implemented successfully and had a positive effect on costs. Investments totaled EUR 37.8 million (net), compared to EUR 46.7 million in the first quarter of 2004. In June, Siltronic opened one of the world's most modern 300 mm wafer manufacturing facilities in Freiberg, on an investment of around EUR 430 million. The first wafers were shipped out to customers the same month. In order to enable accelerated capacity expansion in the 300 mm market, some investments planned for 2005 are being moved forward to 2004.
Revenue growth was very gratifying, rising by 8.5 % compared to the prior quarter to EUR 212.2 million. The growth was 5.8 % adjusted for exchange rate effects. The rise is mainly attributable to two factors: For one thing, increased prices for wafers were a factor in the second quarter, and for another, the product mix was much improved. Due to the strategic focus on 300 mm wafers, the closing of the 200 mm production facility in Wasserburg, and the relocation of 200 mm capacities to Singapore and Portland, sales volume (measured in terms of surface area) reached about the same level as the prior quarter. Compared to the second quarter of 2003, however, sales volume rose significantly (+ 9.8 %).
The Siltronic Group continues to expect significantly improved earnings for the full year 2004 compared to the prior year. The restructuring measures will have even more of an effect in the second half of the year, depreciation and amortization is lower compared to 2003 as planned, and large non-recurring charges will no longer be incurred as in the prior year.
"The reorientation of Siltronic is progressing in all aspects. We will continue to expand our position in attractive product segments and markets, while maintaining consistent cost management," said Dr. Sittenthaler. "The IPO suspended in March will also be resumed once the capital markets have calmed down."
*) Adjusted for exceptional effects from the sale of the polysilicon trading business, first time consolidation and restructuring effects.
Siltronic is a global leader in the market for ultra-pure silicon wafers and the partner of numerous leading chip manufacturers. Siltronic develops and manufactures wafers up to 300 mm in diameter at production sites in Europe, Asia, Japan and the United States.
Silicon wafers form the heart of modern microelectronics – for computers, mobile telephones, Internet, DVD players, flat-panel displays, navigation systems, airbags, computer tomography equipment, aircraft control systems and many more applications.
This press release contains prognostications for the future based on assumptions and estimates of Siltronic's executive board. Although we assume that the expectations in these prognostications are realistic, we cannot guarantee that they will prove to be correct. The assumptions may harbor risks and uncertainties that may cause the actual figures to differ considerably from the prognostications. Factors that may cause such discrepancies include, among other things, changes in the economic and business environment, variations in exchange and interest rates, the introduction of competing products, lack of acceptance for new products or services, and changes in corporate strategy. Siltronic neither plans nor assumes an obligation to update its prognostications.