Chipmaker AT&S cautiously optimistic thanks to stable first quarter

VIENNA (Reuters) - Chipmaker AT&S has kept core profit stable so far in its financial first quarter, it said on Thursday after reporting a 22% decline for the full year on investment to expand the businesss.

FILE PHOTO: The logo of Austrian maker of printed circuit boards (PCBs) AT&S is seen at its headquarters in Leoben, Austria, July 5, 2016. Picture taken July 5, 2016. REUTERS/Heinz-Peter Bader

The company, which produces circuit boards for smartphones and tablets and supplies the likes of Apple, Intel and European auto suppliers, said that new products in its mobile devices unit could be delayed by coronavirus-related economic uncertainty but demand remains strong for inter-circuit (IC) substrate platforms for electronic components .

IC substrates are designed for use in high-end industrial applications, medical devices and navigation systems.

AT&S said it expects stable demand for medical applications but is unable to give guidance for the automotive segment and shied away from a forecast for its 2020/21 financial year owing to the coronavirus pandemic.

Even though AT&S, which generates a large chunk of revenue in China, has largely been unaffected by disruption to supply chains, it said customer demand could be affected in the coming months.

The company was cautiously optimistic for its April-June first quarter, predicting revenue and core profit at the level achieved in the same period last year.

Its shares gained 1.8% in early trade, against a 2% decline for the European sector index.

AT&S reported earnings before interest, tax, depreciation and amortisation (EBITDA) of 194.5 million euros ($210 million) on revenue of 1 billion euros for the year to March 31.

It had cut its 2019/20 revenue forecast by about 7% to 960 million euros in February after the coronavirus outbreak in China.

The group said it plans further investment this financial year to expand capacity, including in facilities in Chongqing, southwest China.

AT&S employs nearly 7,000 staff in China, where it operates one plant in Shanghai and two in Chongqing, about 900 km from the city of Wuhan, where the coronavirus outbreak began.

Reporting by Kirsti Knolle; Editing by David Goodman