AZ Electronic Materials saw shares plummet on Tuesday morning after the chemicals company reported a decrease in first-quarter revenues and warned of a flat year overall.
Group revenue fell 2.0% year-on-year to $19.9m for the three months to April 8th, following lower-than-expected sales in its IC Materials division.
The company blamed weak performance and an unfavourable product mix in IC Materials, which includes products for use in integrated circuits and devices. Revenue in the division fell 7.0% year-on-year to $123.3m.
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"This resulted in the group's EBITDA [earnings before interest, tax, depreciation and amortisation] margin in Q1 being lower than normal," the firm said in a statement.
Based on trading so far in the second quarter, the IC Materials business is expected to continue to perform below expectations for the first half of the year. The group's EBITDA margin for the first half is therefore pegged at less than 30%.
The stock was down 27.1% at 269p by 09:29 on Tuesday.
However, the Optronics business continued to perform well during the period, mainly due to new customer wins in the second half of last year. The division sells products for flat panel displays including televisions and computer monitors,
Optronics revenue in the first quarter increased by 9.0% year-on-year to $56.5m and the business is anticipated to continue to perform well during the year.
AZ Electronic Materials reduced its net debt to $298.7m in the first quarter from $289.4m at December 31st 2012.
"Ongoing discussions with our customers, together with an anticipated strengthening in underlying markets, mean that we remain confident of a stronger environment for growth during the second half of the year, and beyond," the company said.
"The group's revenue growth and EBITDA margin is expected to improve as the year progresses and remain weighted to the second half as per our previous guidance.
"We now expect that group revenue for the full year will be around the same levels as last year, but group EBITDA margin for the year will remain below normal levels."
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