Higher costs cut earnings of Ayala's electronics mfg arm

Higher costs of labor and materials slashed the net income of Integrated Micro-Electronics Inc. , the electronics manufacturing arm of conglomerate Ayala Corp., by more than half in the year's first semester. In a report to the Philippine Stock Exchange on Thursday, IMI said its net income after tax declined 76 percent to $1.1 million "as a result of higher direct costs, which include costs of labor and materials." Consolidated sales revenues, meanwhile, climbed 39 percent to $262.5 million. "The vibrant and challenging times compel us to give more focus on operational excellence to increase productivity and reduce costs. Our diversification strategy across different markets and regions will help cushion the impact of any isolated downturn on our future performance," said Arthur Tan, IMI president and chief executive officer. The company's operations in China and Singapore posted $143.3 million in revenues in the January to June period, a 23-percent growth. The China and Singapore operations contributed 55 percent to IMI's total revenues. The Philippine operations, on the other hand, generated $76.9 million in revenues. IMI is a provider of electronics manufacturing services (EMS) and power semiconductor assembly and test services. It serves markets that include those in the automotive, industrial, medical, solar energy, telecommunications infrastructure, storage device and consumer electronics industries. -- CMA/OMG, GMA News