News

20th November 2002

Third Quarter Results 2002
 

IQE plc (IQE), the leading global outsource supplier of customised epitaxial wafers to the semiconductor industry, presents its 3rd Quarter Results for the period ended 30 September 2002.

Key points

Q3 sales were £5.607m, 12% lower than the previous quarter (Q2/2002: £6.357m) and 32% lower than Q3 of the previous year (Q3/2001: £8.234m), mainly due to strong pricing pressures within the sector.

Q3 operating loss before exceptional items and non-recurring charges was £5.457m, 0.6% lower than the previous quarter (Q2/2002: £5.493m loss), but greater than Q3 of the previous year (Q3/2001 : £2.228m loss).

Q3 operating cash outflow was £3.598m (£2.100m prior to exceptional costs for restructuring and legal fees). This was higher than the previous quarter (Q2/2002: £1.184m) as Q2 had the benefit of £1.600m debtor reduction following resolution of two significant overdue debts. This compared with an outflow of £1.230m in Q3/2001.

Gross cash at the end of Q3 was £19.949m, a reduction of £3.869m since Q2/2002, which included repayment of £0.794m in long term borrowing.

Continued pick up in wireless markets, offset by further weakening in the fibre optic communications marketplace. Continued strong interest in Strained Silicon.

Significant operational improvements allowing stable contribution to overheads despite severe pricing environment.

Improved competitive position with sales relatively flat through 2002 to date, compared with significantly declining sales for main competitors and industry as a whole.

Resolution of long running legal dispute with Rockwell.

Commenting on the results, Dr Drew Nelson, President and CEO, said……

" Continuing difficult conditions in the semiconductor marketplace and lack of visibility throughout the industry continued to adversely affect the Group. However, taken against the continued contraction in the overall compound semiconductor industry, it is clear that IQE is now taking market share from its competitors as a result of its broad product range, clear strategic direction and much stronger financial position.

The Group is realising significant cost savings as a result of earlier actions and this is now resulting in reduced cash outflow, even at the low level of current sales. Whilst the Group remains confident that it is in a strong position within the outsourcing market, the protection of its cash position is paramount and the management is focussed on continual cost savings and working capital reductions.


The Board believes that the Group will benefit strongly as the overall semiconductor industry recovers, and will continue to strengthen its position as the leading outsource supplier of advanced wafer products to the sector."

For further information please contact:

Drew Nelson, President and CEO, IQE plc (029) 20839400
Tim Hawkes, CFO, IQE plc (029) 20839400
Chris Meadows/Leslie Coventry, IQE plc (029) 20839400
Tim Thompson/Nicky Cronk, Buchanan Communications (0207) 4665000