March 06, 2014

IMI posts 88% hike in 2013 net income

In a disclosure, IMI Electronics (57% owned by Ayala Corp) reported that its 2013 net income grew 88% YoY to US$10.5m. This came on a 13% growth in revenues to US$745m with gross margins rising to 9.1% last year from 8.6% in 2012. Earnings growth was also aided by lower interest expenses and significantly boosted by a 13x increase in miscellaneous income to US$2.8m (or 26.7% of net income) as well as a $1.4m forex gain vs. a $0.11m forex loss in 2012.

Our take: We don’t see any major impact of the huge jump in IMI’s earnings to AC. The company accounted for just 1% of AC’s consolidated earnings in 9M13. However, we view the improving performance of the company as this should lessen its drag on AC’s overall earnings. Furthermore, it should render the company more attractive for disposition in the event that AC will decide to sell the company.

AC has earlier indicated its willingness to divest from non-core businesses at the right price to improve its overall profitability and to generate funds to finance its diversification plans. Its BPO arm recently completed the sale of Stream Global Services Inc to Convergys Corp. – WealthSec