Integrated Micro-Electronics Inc. (IMI), the manufacturing arm of the Ayala Group, saw its net loss balloon to $82.9 million in the second quarter of 2023 from the $3.5 million loss incurred in the same period last year.

In a disclosure to the Philippine Stock Exchange, the firm said this includes $84 million of one-off losses related to its divestment of STI Enterprises Limited.

Excluding this one-time loss, IMI’s net adjusted net income for the second quarter is $3.5 million.

IMI reported revenues of $345 million in the second quarter of 2023, three percent lower than the $357 million generated in the same period of the previous year but on par when comparing first-half results. However, the firm did not disclose its first half figures.

Gross margin improved from 8.1 percent to 9.6 percent, with the company posting $33 million of gross profit for the second quarter of 2023.

Through aggressive cost rationalization efforts, and the gradual easing of the component shortage issues, wholly-owned subsidiaries still lead the company’s recovery with $282 million of revenues, a 2.3 percent quarter-on-quarter growth, with gross margins improving by 33 basis points year-on-year.

VIA Optronics and STI met reduced demand as customers depleted existing inventory and pushed out orders. These subsidiaries ended the quarter with $62.8 million in revenues and an adjusted net loss of $1.9 million.

“We have signed an agreement to sell our stake in STI Enterprises Limited to a private investment firm based in London,” said IMI President Jerome Tan.

He noted that, “geopolitical and industry-wide issues including Brexit, COVID-19 and the component shortage significantly hindered the company’s progress the past few years and we believe that the buyers, capital, are well-equipped to support STI’s turnaround by providing additional funding and synergy opportunities within its portfolio of companies.”

“This divestment will enable IMI to focus resource allocation and management efforts to drive our core businesses in the mobility, industrial, and smart energy markets,” added Tan.

“Meanwhile, we continue to push for increased manufacturing efficiency and revenue growth with the right customers,” said IMI Chief Executive Officer Arthur Tan.

He said “we recently inaugurated the Laguna manufacturing facilities for one of our new partners, Zero Motorcycles, a world-leading EV motorcycle company. We look forward to forging more new partnerships and continue to grow a more profitable IMI.”