Preliminary Results for the Year Ended 31 December 2004

22 Mar 2005


IQE plc (IQE), the leading global outsource supplier of customised epitaxial wafers to the semiconductor industry, today announces its Group Preliminary Results for the year ended 31 December 2004.

KEY POINTS

• Full year revenue down 18.2% at £15.344m (2003: £18.753m) as the weak dollar, selling price reductions and a weak third quarter impacted sales. In dollar terms, sales were down 8.5% at $27.907m (2003: $30.490m)

• Wafer volumes increased by 27.3% to approximately 140,000 units (2003: 110,000 units)

• Despite lower revenues, the loss on ordinary activities before taxation was reduced by 25.9% to £10.104m (2003: £13.639m) as a result of tight cost control, cost reduction measures and continued improvement in operational efficiencies.

• Operating cash outflow reduced by 9.9% at £9.096m (2003: £10.100m)

• Closing year end cash at £9.923m (2003: £21.738m)

• Operating cash breakeven run rate lowered to £25.800m revenue (2003: £41.400m) through continued improvements in operational efficiencies and substantial cost reduction programmes

• Won major outsourcing contract worth approximately $25.000m over first two years for RF wireless applications, production commenced in last few weeks of 2004

• Positive customer feedback on strained silicon indicating substantial performance improvements, leading to patent applications on technology

• Prospects very good for significantly increased revenue in 2005

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

“After some setbacks in our main market sectors during quarter three, the last few weeks of 2004 saw a significant upturn in business with the commencement of a major outsource contract, increased demand for RF products driven by renewed growth in the mobile handset marketplace, and the completion of some significant qualifications.

The winning of a major outsource contract worth around $25.0m over the first two years has enabled the Group to exit the year with its largest order book for over twenty four months and an exit revenue run rate which will deliver substantially improved revenues in 2005. I am confident the Group can achieve its key initial objective of ongoing monthly cash generation in the near future with the outlook for 2005 being positive.”
 

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Contacts:

IQE plc :
Drew Nelson +44 (0)2920-839400
Stuart Hall +44 (0)2920-839400
Chris Meadows +44 (0)2920-839400

Buchanan Communications :

Tim Thompson/Nicola Cronk +44 (0)2074-665000