Integrated Micro-Electronics, Inc. (IMI), the tech manufacturing arm of the Ayala Group, incurred a net loss of $2 million in the first quarter of 2022—a reversal from the $2.2 million earned in the same period last year.

In a disclosure to the Philippine Stock Exchange, the firm said revenues inched up 2 percent to $334 million in the first quarter of 2022 from $327 million in the same period last year despite continued increase in business backlog.

IMI said supply chain delays have hindered profitability but cost saving measures and continued collaboration with customers and suppliers mitigated the increased costs.

“As the entire industry has been dealing with the global component shortage for more than a year, IMI teams across the globe continue to embody the resilience and determination that has enabled us to rebound from similar macro-economic obstacles in the past,” said IMI Chief Executive Arthur Tan.

He added that, “Customer demand remains strong and new product development is still in high gear as evidenced by our revenue growth and strong pipeline performance despite the global supply chain issues in the past several quarters.”

“The focus now is on driving profitability by collaborating with customers and improving supply chain efficiency as the component situation normalizes,” noted Tan.

IMI’s wholly-owned businesses ended the first quarter with $258 million in revenues, 1 percent better than the same period last year.

These operating sites have significantly improved quarter-on-quarter profitability with a net income of $3.3 million in the first compared to a $0.7 million loss in the previous quarter.

Meanwhile, subsidiaries VIA Optronics and STI started the year with $76 million in revenues, a 4 percent improvement versus last year.

However, with these business units having more specialized products in the automotive, aerospace and defense markets, extended supply lead times and limited opportunities to use alternative components have significantly affected margins.

Covid-related shutdowns and transportation disruptions in Suzhou, China have also affected operations in VIA.

In total, non-wholly owned subsidiaries ended the first quarter with a net loss of $5.3 million.

“The recent lockdowns in China and intense geopolitical tension in Europe have created a new set of uncertainties in the global market,” said IMI President Jerome Tan.

He noted that, “Along with the extended recovery of the electronics supply chain, IMI is still being challenged by multiple macroeconomic headwinds.”

“However, globally, we have been managing these disruptions while taking advantage of opportunities to improve our operations. As more economies start to open up and the world returns to normalcy, the company remains committed to manufacturing excellence and accelerating our return to better profitability,” Tan added.