IQE PLC on Wednesday said it expects to meet revenue and earnings market consensus in 2024 despite a drop in sales in its latest financial year.
Shares in IQE rose 31% to 26.10 pence each in London on Wednesday morning.
The Cardiff, Wales-based supplier of compound semiconductor wafer products said revenue fell 31% to £115.3 million in 2023 from £167.5 million the year before.
The drop in revenue was reflected by a drop in sales for IQE’s Wireless division of 29% to £53.9 million from £76.0 million due to high inventory levels in the market, as well as delays to its 5G infrastructure deployment. In addition, Photonics sales fell 33% to £59.1 million from £88.7 million a year ago, while CMOS++ revenue was down 18% to £2.3 million from £2.8 million.
Pretax loss narrowed to £28.8 million from £75.4 million the year before, as adjustments dropped 92% to £5.6 million from £69.4 million a year prior.
Adjusted earnings before interest, tax, depreciation and amortisation plunged 82% to £4.3 million from £23.4 million in 2022.
Looking ahead, IQE said recovery seen in the second half of 2023 has continued into the new financial year, noting that inventory levels have begun to normalise, as well as customer demand. It added that trading in its first quarter has been in line with expectations, despite ‘persisting uncertainties’ in the global economy.
IQE added that 2024 revenue and adjusted Ebitda are expected to be within the range of analyst forecasts of £133.7 million to £153.7 million and £11.1 million to £16.6 million respectively.
Chief Executive Officer Americo Lemos said: ‘I am pleased with the resilience of the business and dedication of our people despite 2023 being a particularly challenging year for the semiconductor industry. As forecast, IQE returned to double-digit growth in [the second half] over [the first half], and additionally took strategic actions to reshape our cost base as part of our ongoing commitment to improving margins and profitability.
‘Buoyed by the ongoing industry recovery, IQE is well positioned within the global value chain to deliver sustainable growth and capture opportunities in 2024 and beyond,’ he added.
IQE also announced that its partnership with Taiwan-based Advanced Wired Semiconductor Co has been extended with a multi-year supply agreement.
Under the collaboration, IQE said it will supply AWSC with gallium arsenide wafers for the manufacture of smartphone power amplifier devices.
This supports the firm’s expectations for the coming year, whilst delivering on its strategy to defend its position in wireless markets, IQE said.
IQE and AWSC had first signed the deal in 2022.
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