ASMPT Earnings: One-Offs Hit Margins and Industry Downturn Continues

ASMPT’s third quarter was hit by a number of largely one-off factors that negatively affected profitability. The industry also remains toward the bottom of a downcycle and there are few signs yet of a near-term recovery. Third-quarter revenue fell 24% year on year to HKD 3,474 million, with gross profit margin of 34.2% compared with 40.9% in the third quarter of 2022. Net profit of HKD 12.8 million was down 98% year on year. Restructuring costs of HKD 40.4 million, mainly relating to redundancies, were incurred in the quarter. The semiconductor solutions segment also saw gross margin fall to 31.9% (from over 40%) in every quarter for the past two years, due to unfavorable product mix and provision for aging inventories. Management is guiding to a return to gross profit margins of around 40% for the semiconductor solutions segment in the fourth quarter, despite forecasting broadly flat revenue from the segment, so we are comfortable that the gross margin issues are largely one-off.