Restructuring to boost profit by $5M, says IMI

AYALA-LED Integrated Micro-Electronics Inc. (IMI) said Wednesday that the restructuring of its overseas operations would have little effect on group profits and yield annualized cost savings of approximately $5 million.

A day earlier, IMI said that unit IMI USA would cease its prototyping and manufacturing activities and that it was also closing its sales office in Japan and downsizing its Singapore and Malaysia offices.

“The cessation of prototyping and manufacturing activities in IMI USA has a minimal effect on IMI Group’s revenue since it is only approximately 0.30 percent of the total IMI Group revenues,” it said in the disclosure.

The office restructuring efforts in the four locations (US, Japan, Singapore and Malaysia) are part of the company’s initiatives to align the cost structure with the current business needs and is not expected to disrupt the Company’s operations,” it added.

“These activities would yield to annualized cost savings of approximately $5 million improvement in the net income.”

The end to IMI USA’s prototyping and manufacturing activities will follow a partnership with California-based XLR8 Corp., a prototyping expert.

XLR8 will provide the prototyping needs of IMI’s selected customers, while IMI will become XLR8’s preferred manufacturing partner for its mass production projects.

IMI narrowed its net loss to $8.8 million for the first half of 2024 from a net loss of $83.7 million last year.

Group revenues fell 18 percent to $566 million from $692 million a year ago, partly attributed to the divestment of Surface Technology International Enterprises Ltd., which was still part of the group in early 2023.

“We have initiated various activities aimed at fortifying our financial health, enhancing operational effectiveness, and delivering greater value to our stakeholders,” IMI CEO Louis Hughes earlier said when the company reported its first-half results in August.

“These measures include streamlining operations through simplified organizational structures to enhance decision-making agility,” he added.