AZ Electronic Materials to meet full-year expectations

Speciality chemicals producer AZ Electronic Materials had a stronger third quarter and confirmed that it's on track to meet full-year expectations; this was sufficient to send its share up in mid-morning trading.

In an Interim Management Statement (IMS) covering the period from July 1st to October 24th, it said: "Current trading in October shows that overall the business is performing in line with our expectations, which for the 2012 full year are unchanged."

Consensus estimates for the full year ending December 31st are for pre-tax profits of £106.79 on revenues of £502.42m, with earnings per share of 22.67p.

As part of the IMS it also provided financials for the period up to the end of its third quarter at September 30th.

In the three-month period to September 30th, revenues increased 1% year-on-year to $203.5m (Q3 2011: $202m), and on a constant currency basis was up 4%. Group revenue for the nine months was $587.1m, down 1% from the same period last year.

Divisional breakdownIn the IC Materials division, revenue in the third quarter decreased by 3% year-on-year to $135.4m (Q3 2011: $140.2m), and on a constant currency basis was flat against the third quarter 2011. This was because some customers in the memory sector undertook modest wafer capacity reductions in the third quarter, causing some short-term variation in the pattern of demand for AZ's materials. Revenue for the nine months was $401.2m, down 2% from the same period last year (down 1% at constant currencies).

Its Optronics business made good progress in the third quarter of 2012, driven by improved trading conditions in the global flat panel industry and recent customer wins in Taiwan and Japan. Revenue in the third quarter increased by 11% year-on-year to $63.2m (Q3 2011: $57.0m), and on a constant currency basis was up 14% on the third quarter 2011. Revenue for the nine months was $171.3m, up 3% from the same period last year (up 4% at constant currencies).

In its Printing and Other division, revenue in the third quarter increased by 2% year-on-year to $4.9m (Q3 2011: $4.8m), and on a constant currency basis was up 14% on the third quarter 2011. Revenue for the nine months ended was $14.6m, down 17% from the same period last year (down 11% at constant currencies).

The FTSE-250 company said that its EBITDA [earnings before interest, tax, depreciation and amortisation] margin in the third quarter was "in line with our expectations".

Net debt at September 30th was $305.4m, a reduction of $24.1m since June 30th, reflecting the group's continuing strong operating cash generation.

CM