TOP NEWS: Aixtron cuts year-end guidance after weak first half

(Alliance News) - Aixtron SE on Thursday cut annual guidance after a poor second quarter ended a largely disappointing half year.

The Herzogenrath, Germany-based manufacturer of chemical vapour deposition equipment for semiconductors said second quarter revenue fell 24% to EUR131.8 million from EUR173.5 million. Net profit fell 72% to EUR11.2 million from EUR40.4 million.

The company blamed "weaker overall market dynamics" for the decline, though both second quarter order intake and first half revenue were stable.

Second quarter order intake slipped only 1.0% to EUR175.7 million from EUR177.8 million. Its silicon carbide and gallium nitride systems were largely responsible for the upkeep.

Revenue in the half was flat at EUR250.1 million from EUR250.7 million a year prior. The company said its G-10 product family was the mains earnings driver through the first half.

Aixtron's first half order intake fell less drastically, 7% to EUR296.0 million from EUR317.7 million a year prior.

Chief Executive Officer Felix Grawert commented: "We maintained our strong position in the first half of the year, and this despite the overall trend. The strong demand for our technology continues across all addressed end markets, particularly in the SiC segment. We have not only succeeded in acquiring new customers, including one of the top five suppliers of SiC components. We were also able to secure major follow-up orders from important existing customers. Here, Nexperia is a good example in the field of power electronics, where we were able to impress with both, our SiC and GaN systems. This momentum is reflected in our [second quarter] order intake."

SiC and GaN products accounted for 57% and 29% of second quarter orders respectively.

Second quarter earnings before interest and taxes fell 72% to EUR12.9 million from EUR44.6 million. In the half they fell 53% to EUR22.8 million from EUR48.1 million.

Earnings per share fell 72% to EUR0.10 from EUR0.36 in the quarter and 49% to EUR.20 from EUR0.39 in the half.

As a result, Aixtron has cut its year-end revenue guidance to between EUR620 million and EUR630 million, down from a projected EUR630 million to EUR720 million.

The company expects third quarter revenue between EUR150.0 million and EUR180.0 million. It posted revenue of EUR165 million in the third quarter of last year.

Despite the guidance cuts, Aixtron remains optimistic of both its new Turin, Italy production center and ongoing construction and its Herzogenrath innovation center.

Chief Financial Officer Christian Danninger added: "We are investing in the future. The additional site in Italy serves to strategically secure our growth plans. And our new innovation center will further strengthen our research and development activities. This will enable us to offer technologies that not only meet the current high demands of the semiconductor industry but also anticipate and serve future trends"

Aixtron shares fell 2.6% to EUR19.58 each in Frankfurt on Thursday

By Aidan Lane, Alliance News reporter

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