Adtest’s operating income for the current fiscal year falls below market expectations due to product mix

[Tokyo 26th (Reuters)]- Advantest (6857.T) New Tab opens new tabannounced on the 26th that it expects consolidated operating profit (International Financial Reporting Standards) for the fiscal year ending March 2025 to be 90 billion yen, an increase of 10.3% from the previous year. Due in part to the product mix, the company’s forecasts are lower than market forecasts. On the demand side, although semiconductor test equipment for generative AI (artificial intelligence) is expected to grow, sales for automotive, industrial equipment, and consumer products will further decline.

The average consolidated operating profit forecast of 16 analysts compiled by IBES is 135.2 billion yen.

Although the company’s forecast is lower than this, Yasuo Mitsuhashi, Chief Financial Officer (CFO), said at a briefing, “The reason for the slow rate of profit growth is that the sales composition of memory testers, which normally accounts for 20-30%, will increase in fiscal 2024. “This is because it affects profitability.” In the future, in addition to increasing the number of high value-added testing equipment, we will also strengthen our supply chain and increase production efficiency. He said the impact of the US restrictions on China is “not counted as large.”

Regarding semiconductors, demand and supply are expected to improve, and investment related to generative AI is expected to increase, and the economy is expected to become active from the second half of the year. Regarding the semiconductor testing equipment market, in which the company has a large share, demand for generative AI is expected to increase, while demand for major consumer devices such as smartphones and PCs continues to be sluggish, and recovery is expected to take time. I’m watching.

The assumed exchange rate is 1 dollar = 140 yen (previous term result: 143 yen), 1 euro = 155 yen (155 yen). A 1 yen depreciation against the dollar would add 700 million yen to operating profit, and a 300 million yen loss against the euro.

Consolidated operating profit for the fiscal year ending March 2024 was 81.6 billion yen, down 51.3% from the previous year, lower than the company’s forecast of 85 billion yen. Although sales for high-performance DRAM related to generated AI increased, the market for test equipment for non-memory semiconductors slowed down more than expected. In addition to the rise in raw material costs, the company recorded a 9 billion yen loss on partial impairment of goodwill in the January-March period, resulting in a sharp decline in profit.

The company has formulated a new medium-term plan, which is scheduled to be announced on June 25th.

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The article is in Japanese

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