AYALA-LED Integrated Micro-electronics Inc. (IMI) said damage from a fire that hit one of its facilities in China would have a negligible impact on its revenues.
In a disclosure to the Philippine Stock Exchange (PSE) Thursday, IMI said the second floor of one of its four buildings at the Economic Industrial Zone in Jiaxing City was gutted by fire.
The fire broke out at about 8:05 a.m. on Wednesday and was put out at 9:45 a.m.
“Other production facilities in the three buildings were not damaged and have resumed normal operations,” the company said.
IMI said management was in the process of assessing the total loss sustained and that damage to equipment and inventories was covered by fire insurance.
The company did not specify which of the production facilities were damaged and said that no employees were injured during the incident.
“Revenue contribution of the affected production line is not significant and it will have little effect on our revenues,” the company said.
As of the third quarter of last year, IMI’s China operations recorded revenues of $214.3 million or a third of IMI’s total revenue of $621.5 million.
For the nine months to September last year, revenue from its China operations declined 13 percent year-on-year as the rollout of 4G telecommunications network appears to have reached its projected volume in the country, the company said.
The revenue drop was also affected by lower orders.
“We expected the decline in telecom network infrastructure capital expenditure in China.
Fortunately, our businesses in the Philippines, Eastern Europe and Mexico are doing well and compensate for the deficiency in the Chinese market,” IMI president and chief executive officer Arthur Tan said.
Tan said the slowdown in China’s economy is affecting the company’s ability to gain new programs there “but this setback will be short-lived.”
“The changes that are being implemented by the Chinese government are necessary for long-term stability of their economy. China will continue to be a relevant world economic market and so IMI will continue to be dependent on it,” Tan said.
IMI reported profit of $22 million for the nine months to September 2015, a 5 percent increase from the $21 million recorded in the previous year.
Tan said the company still managed to increase its profits despite the global economic rout and the slowdown in the electronics industry.