[ITM Semiconductor]
[ITM Semiconductor]

Continuing-operations sales reach 135.7 billion won, led by Samsung phones and e-cigarettes

Apple wind-down costs, restructuring charges drive 10.1 billion won operating loss

Company targets second-half profitability recovery, builds out humanoid robot battery business

ITM Semiconductor posted sales of 135.7 billion won ($95.9 million) in the first half of this year on a continuing-operations basis — excluding its Apple battery protection circuit business — up 10.7 percent from 122.5 billion won in the same period last year. The company recorded an operating loss of 10.1 billion won over the same period, as costs tied to winding down the Apple business weighed on results.

The company ended its Apple supply relationship in April, when that business accounted for more than half of total sales, and has since pivoted to Samsung Electronics smartphone protection circuits and e-cigarettes. ITM Semiconductor's Apple-related sales reached 345.8 billion won last year, representing 57.3 percent of consolidated total sales of 603.1 billion won. The first-half results mark the first full reporting period showing how well the remaining businesses have filled that gap.

Both core businesses posted double-digit growth. Sales of smartphone protection circuits for Samsung Electronics rose 31.9 percent to 41.8 billion won from 31.7 billion won a year earlier, driven by expanded supply. The e-cigarette business grew 24.8 percent to 75.5 billion won from 60.5 billion won, as its Indonesian subsidiary increased device exports and cartridge supply.

The first-half operating loss reflected costs concentrated in the Apple wind-down and the build-out of a new business structure. The company said it redirected some Apple-related production equipment toward domestic customers' protection circuit manufacturing, and incurred temporary labor costs while adjusting local headcount tied to the Apple business. Proactive investments — including organizational reinforcement to meet higher quality standards set by key customers and the establishment of a new advanced-technology unit — also contributed to higher costs.

Earlier this year, ITM Semiconductor reported first-quarter consolidated sales of 132.2 billion won and an operating loss of 4.9 billion won, narrowing from an operating loss of 5.7 billion won in the same quarter a year earlier. The company plans to complete Apple-related personnel and organizational adjustments in the second half, resolve remaining wind-down costs by year-end, and focus on improving profitability in its core businesses.

Securities analysts are watching for a normalization of the cost structure. In a March report, Hana Securities projected ITM Semiconductor's full-year sales at 412.9 billion won and operating profit at 10.4 billion won, factoring in lower depreciation charges and flagging the possibility of a return to profitability this year.

The company is also working to secure future growth drivers. It is sequentially building out development lines for humanoid robot battery packs and motor controllers at its headquarters, in response to expanded humanoid robot development by major domestic companies. ITM Semiconductor is also pursuing plans to extend its existing battery protection circuit, battery pack design and manufacturing technology into the medium- and large-format battery segment.

"In the first half, growth in Samsung-oriented smartphone protection circuits and the e-cigarette business demonstrated the results of the portfolio restructuring we have pursued since exiting the Apple business," CEO Na Hyeok-hwi said. "In the second half, we will focus on improving profitability through cost-structure optimization while continuing to expand future growth businesses including robotics, humanoid robots and defense."


hong@heraldcorp.com