January-March net sales decreased by 30 percent year-on-year and amounted to EUR 6.2 (8.9) million. Net sales development was depressed especially by weak demand in the semiconductor industry and a weaker product mix than in the comparison period.
Although the decline in net sales in the Semiconductor Industry customer segment was strong in the first quarter, market data indicates that its business cycle has already turned around. For example, according to the Semiconductor Industry Association, which follows the semiconductor industry, global sales of semiconductors grew by 15-16 percent in January-February compared to the reference period of 2023, and the association predicts that growth will continue at a similar level throughout 2024. However, the positive development of the semiconductor market is not immediately reflected in PCB sales, as inventory levels are still high in various parts of Aspocomp’s customers’ value chain. When inventory levels gradually return to normal, the recovery of the semiconductor cycle is expected to be gradually in the demand for Aspocomp’s products as well. Even in the longer term, the semiconductor industry’s growth prospects are strong.
Of the other customer segments, Industrial Electronics developed the best in the first quarter. The active sales work of the Security, Defense and Aerospace customer segment was reflected in net sales, which increased from the comparison period. The Telecommunication customer segment continued to be weighed down by the weak demand situation among end customers.
First-quarter operating result remained a loss, at EUR 1.6 (+0.3) million. The operating result was burdened by a decrease in net sales, the weakened product mix and higher material costs caused by a process failure that continued since the end of last year. The process failure is not expected to affect Aspocomp’s financial development in the second quarter of 2024.
Inflation and interest rates, the economic recession, the uncertainties posed by Russia’s war of aggression and the situation in the Middle East, and global trade policy tensions will affect the operating environment of Aspocomp and its customers in the 2024 fiscal year. Demand for Aspocomp’s products is expected to recover gradually during 2024. We reiterate the guidance that was published on March 14, 2024, that Aspocomp’s net sales will increase from 2023 and its operating result improve from 2023. In 2023, net sales amounted to EUR 32.3 million and the operating result was a loss of EUR 1.7 million.
My ten-year journey in Aspocomp’s management will come to an end on May 20, 2024, when Manu Skyttä will take the helm as the CEO of the company. I would like to warmly thank the staff, shareholders and our customers for these years.
Espoo, April 18, 2024
Mikko Montonen