IQE sees FY results at lower end of market views, shares slump

IQE slumped on Tuesday as it said its full-year performance was set to be at the lower end of analyst forecasts, as some markets remain in recovery in the second half of the year.

Analysts expectations are for FY 2024 revenue of between £130m and £153.7m and for adjusted earnings before interest, tax, depreciation and amortisation of £11.1m to £16.6m.

In unaudited results for the six months to 30 June, the supplier of compound semiconductor wafer products and advanced material solutions said it swung to an adjusted EBITDA of £6.6m from a loss of £5.7m in the same period a year earlier. Revenue rose 26.9% to £66m and operating losses narrowed to £12.1m from £19.6m.

Revenue in the wireless segment rose 73% to £38.8m as a result of inventory normalisation and design wins in Android RF Front End markets. Meanwhile, Photonics saw a 4% dip to £26.8. IQE said a reduction in segments of InP telecoms markets was partially offset by strength in GaAs Photonics and infrared sensing product sales.

In the CMOS++ division, revenue was 70% lower at £0.5m, reflecting a strategic rebalancing of IQE's product portfolio and a shift in focus towards diversification into GaN Power and MicroLED.

Chief executive Americo Lemos said: "IQE delivered a consistent performance in the first half of 2024, with a 27% rise in revenue year-on-year and a return to a positive adjusted EBITDA position.

"We expect the market to continue to show pockets of recovery during the second half, resulting in more moderate growth for 2024 on a full-year basis. We look forward to progressing the planned IPO of our Taiwanese subsidiary, which will help to accelerate our diversification strategy into the GaN Power market and microLED, and will provide additional significant cash resources for the company."

At 1100 BST, the shares were down 14% at 20.38p.