LONDON (dpa-AFX) - Shares of AZ Electronic Materials S.A. (AZEM.L) plunged around 27 percent in the morning trade on London Stock Exchange after the specialty chemical materials producer reported a decline in first-quarter revenues and EBITDA margin, and warned on first half and fiscal 2013 EBITDA margin.
In its first quarter, revenue decreased 2 percent to $179.9 million from last year's $184 million. This resulted in lower-than-normal EBITDA margin in the quarter.
In its interim management statement for the period from January 1 to April 8, the Luxembourg-based company noted that its revenues were hurt by weakness in IC Materials division with lower than expected sales and unfavourable product mix, partly offset by continued strength in Optronics.
IC Materials revenue in the quarter dropped 7 percent year-on-year to $123.4 million as softness in demand patterns within the IC industry was compounded by increased pressure from dual sourcing by certain customers as well as efficiency-related dispense volume reductions. In addition, AZ's Klebosol colloidal silica materials sales have been lower than anticipated in non-electronic applications. The company noted that the pricing has been in line with its expectations.
Optronics business' revenue increased 9 percent year-on-year to $56.5 million, mainly due to the year-on-year benefit of new customer wins achieved in the second half of last year. This was despite the slowing down of the growth of the global flat panel industry since the latter half of 2012.
Looking ahead for the first half, the company now expects EBITDA margin to be under 30 percent. According to the company, recent trading and order visibility for the second quarter show that the IC Materials business is likely to continue to perform below the company's expectations for the first half of the year.
'Ongoing discussions with our customers, together with an anticipated strengthening in underlying markets, mean that we remain confident of a stronger environment for growth during the second half of the year, and beyond. The Group's revenue growth and EBITDA margin is expected to improve as the year progresses and remain weighted to the second half as per our previous guidance,' the company said in its statement.
The company also said it now expects full-year group revenue will be around the same levels as last year, but Group EBITDA margin for the year will remain below normal levels.
AZ Electronic added that it expects Optronics to continue to perform well during the year.
The company also said that despite its short-term challenges, it remains confident of its strategy for growth, with encouraging progress on development of new products with key customers in both IC Niche and Optronics. The Board is confident that this will deliver growth in revenue and profits beyond this year in line with long-term guidance.
In London, AZ Electronic shares are currently trading at 266.10 pence, down 102.90 pence or 27.89 percent.
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