UMS Integration Limited Delivers Robust 9MFY2025 Results Amid Global Industry Tailwinds

Key Highlights for Investors

• Net Attributable Profit Up 4%: UMS reported a net attributable profit of S\$30.5 million for the first nine months of FY2025, marking a 4% year-on-year (Y-o-Y) increase despite challenging global conditions.
• Revenue Growth: Revenue increased 5% Y-o-Y to S\$184.3 million, driven mainly by higher semiconductor component sales.
• Improving Margins: Gross material margin rose to 56.1% (from 52.8% previously), attributed to better product mix and increased productivity.
• Shareholder Rewards: The Board proposed a third interim dividend of 1.0 cent per share and a 1-for-4 bonus issue, reflecting confidence in future performance and rewarding shareholders.
• Successful Secondary Listing: UMS’s secondary listing on Bursa Malaysia boosted its share price and market capitalization above S\$1 billion.
• Strong Position for AI-driven Growth: UMS is well-poised to benefit from a global rebound in the semiconductor sector and sustained aviation demand.
• Healthy Financials: Despite increased capex and inventory, UMS maintains a healthy balance sheet, with positive net cash from operations.
• EPS and NAV Growth: Earnings per share (EPS) for 9MFY2025 rose to 4.30 cents, and Net Asset Value (NAV) per share increased to 60.25 cents.

Detailed Financial Performance

Quarterly and Nine-Month Results

• 3QFY2025: Revenue declined 9% Y-o-Y to S\$59.3 million due to softer sales in both semiconductor (-8%) and aerospace (-16%) segments. However, net profit increased 11% Y-o-Y to S\$11.4 million, and pre-tax profit improved similarly. Net attributable profit edged up 1% to S\$10.5 million. EPS for the quarter rose to 1.47 cents.
• Geographical Performance: Sales in Malaysia surged 71% and ‘Others’ (including Korea) jumped 99% due to new customers, while the US and Singapore saw declines of 33% and 21%, respectively.
• Semiconductor Segment: For 9MFY2025, sales rose 7% Y-o-Y, driven by a 15% jump in component sales (to S\$89.3 million). Semiconductor Integrated System sales remained stable (-1% Y-o-Y).
• Aerospace and Others: Both segments dipped 5% and 6%, respectively, but remain strategic contributors.
• Profitability: Group pre-tax profit for 9MFY2025 was up 8% to S\$36.7 million, with net profit and net attributable profit increasing 7% and 4%, respectively.
• Expenses: Personnel costs rose 1%, depreciation jumped 30% (from new machineries), and other charges ballooned due to higher exchange losses and inventory provisions, partly offset by asset disposal gains.
• Cash Flow: Positive net cash from operations (S\$16.9 million for 9MFY2025), but free cash flow turned negative (S\$-17.4 million) due to S\$35.4 million capex investment in Malaysian expansion and higher inventories.
• Dividend Payout: S\$21.3 million paid out in dividends during the first nine months.

Strategic Developments and Growth Drivers

• New Product Introduction (NPI): UMS is successfully ramping up production for its new major customer, with shipments expected to accelerate in coming months.
• Industry Outlook: The global semiconductor market is set for robust growth, driven by AI demand, regional manufacturing, and next-gen chip technologies (2nm and smaller nodes, gate-all-around transistors). Worldwide 300mm wafer fab equipment spending will exceed US\$100 billion in 2025, and reach US\$374 billion by 2028.
• Memory Segment: DRAM and 3D NAND equipment investments are projected to total US\$136 billion over the next three years, signalling a new memory cycle.
• Aerospace Sector: Air travel demand and defence spending remain strong. IATA forecasts global airline revenues to hit nearly US\$1 trillion in 2025, with Asia-Pacific leading growth (9% Y-o-Y).
• Regional Expansion: China, South Korea, and Taiwan will lead semiconductor spending from 2026-2028, with the US investing significantly as well.

Shareholder-Focused Updates

• Bonus Issue and Dividend: The proposed 1-for-4 bonus issue and third interim dividend of 1.0 cent per share are significant rewards for shareholders, reflecting management’s confidence and strong outlook.
• Market Recognition: UMS’s inclusion in indices such as the SGX iEdge Singapore Next 50, MSCI Global Small Cap, FTSE ST Singapore Shariah, and being named in Forbes Best under a Billion further enhances its visibility and attractiveness to institutional investors.
• Secondary Listing Impact: The successful listing on Bursa Malaysia has unlocked shareholder value, driving share price and market cap above S\$1 billion—a major milestone.
• Company Name Change: UMS Holdings Limited is now UMS Integration Limited, better reflecting its integrated capabilities and distinguishing it in the Malaysian market.

Management Comments & Forward Guidance

CEO Andy Luong affirmed, “Our performance in the first nine months is a testimony to our resilience and strength despite global uncertainties. We are sharpening our competitive edge with new NPIs, and our secondary listing has unlocked value for shareholders. We remain committed to prudent growth and capturing AI-driven opportunities. Barring unforeseen circumstances, the Group expects to remain profitable in FY2025.”

Outlook & Risks

• UMS expects continued profitability in FY2025, supported by industry tailwinds in both semiconductors and aerospace.
• Potential risks include ongoing geopolitical tensions, US trade tariffs, supply chain constraints, and foreign exchange fluctuations.
• Significant capex and inventory increases may weigh on free cash flow in the near term, but are viewed as investments for future growth.

Conclusion

UMS Integration Limited’s 9MFY2025 results demonstrate strong operational and financial momentum, with exciting prospects ahead driven by industry growth, strategic investments, and shareholder-focused initiatives. The proposed bonus issue, healthy dividend payout, and successful secondary listing are clear signals of confidence and growth, and are likely to be price-sensitive events that could influence share value positively.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research and seek professional guidance before making investment decisions. Past performance is not indicative of future results. The information herein is based on publicly available data and management commentary as of the date of publication.

View UMS Historical chart here