Lower demand from Samsung downs Phoenix Semiconductor's 2015 net income

Phoenix Semiconductor Philippines Corp. (PSPC) on Monday said net income fell by nearly a quarter in 2015, as lower demand and production volumes downed revenues.

Net income after tax totaled $13.46 million, down 22.86 percent from $17.45 million year-on-year, the company, a supplier of Samsung Electronics, told the Philippine Stock Exchange.

"The decline in the global semiconductor assembly and test company was on account of the 10 percent decline in revenues of $208.86 million from $233.33 million due to lower production volumes and demand from Samsung Electronics of Korea, particularly in the second half of 2015," the company said.

Under a Business Transaction Agreement, Samsung outsources electronic parts with Phoenix Semiconductor.

“The global semiconductor industry was affected by the downturn in the China economy and excess inventory levels in the memory segment of the semiconductor industry,” Kyuho Han, PSPC director and treasurer said, noting that the slump in China led to weaker prices for devices which worsened the profit decline.

The company's earnings before income tax, depreciation, and amortization (EBITDA) decreased to $39.25 million from $42.93 year-on-year, while total assets fell to $180.00 million from $199.52 million.

Han said the semiconductor industry is characterized by cyclical movements, but the company is "financially strong to cope" with these fluctuations.

“PSPC’s financials remains sound as evidenced by positive liquidity and the continued healthy operational efficiencies in 2015,” he said.

"The current weakness in the global economy due to the China slowdown is expected to ease and reverse in the second semester of 2016," PSPC said. – Jon Viktor Cabuenas/VDS, GMA News