The circuit board manufacturer AT&S made a loss of 63 million euros in the first half of 2024/25, after a profit of 49 million euros in the same period last year. Sales fell by 2 percent to 800 million euros in the first six months of the current financial year, the company announced on Thursday. In the second quarter, the circuit board manufacturer recorded a loss of 29 million euros, after a profit of 51 million euros in the same period of the previous year.
AT&S is trying to counteract this with a two-year cost-cutting program: This is expected to bring about 250 million euros in savings.
Volumes increased significantly
AT&S managed to significantly increase volumes, said Peter Schneider spokesman for the board of AT&S, on Thursday. Finally, AT&S was able to increase sales in the second quarter compared to the previous quarter by 29 percent to 451 million euros, thus reaching the previous year’s level again.
Nevertheless, the company was exposed to massive price pressure for both printed circuit boards and especially IC substrates as well as weakness among customers in the European automotive and industrial markets, which could not be compensated for by higher volumes. The volumes in the areas of mobile devices, computers and communications infrastructure proved to be stable.
Ongoing price pressure
In the printed circuit board area, AT&S reported sales of 283 million euros for the second quarter, 35 percent more than in the first three months of the current year. The EBITDA margin was also increased from 18 to 24 percent. In the case of IC substrates, on the other hand, AT&S was able to increase sales in the second quarter by 19 percent to 168 million euros compared to the previous quarter, but the EBITDA margin fell from 20 to 12 percent.
The ongoing price pressure is also reflected in the operating result (EBITDA), which fell by 27 percent to EUR 217 million in the first half of the year. However, the situation worsened in the second quarter: EBITDA fell by 35 percent to EUR 93 million. The EBITDA margin deteriorated by 6.6 percentage points to 28.1 percent in the second quarter.
Production at new plants delayed
A rapid improvement in the market environment is not in sight. There will be no change for the time being in terms of price pressure or the volatile ordering behavior of a key customer.
AT&S counts Intel, Apple as well as European car manufacturers among its customers. In addition, high-volume production in the two new plants will be delayed Leoben as well as in Kulim, Malaysiaby one or two quarters, so that these will not bring any significant sales contributions in the current financial year.
Production is expected to start in the two plants in the fourth quarter of the current financial year. The work in Then, Koreafor flexible printed circuit boards was sold in September this year for 405 million euros – subject to regulatory approval. The sale is expected to be completed within 12 months.
Sales expectations revised downwards
Due to the current situation, the forecast for the current financial year has been adjusted: Sales are now expected to be between 1.5 and 1.6 billion euros, instead of 1.6 to 1.7 billion euros. The EBITDA adjustments are now stated at up to 110 million euros, instead of up to 88 million euros. The adjusted EBITDA margin should still be 24 to 26 percent.
However, with the expansion of production capacities in Kulim and the expansion of the Leoben location, sales should increase to around 3 billion euros in the 2026/27 financial year, the company also announced. The EBITDA margin should then be 27 to 32 percent. The sales from the second plant in Kulim are not included here.