AT & S in Austria hit by smartphone and falling car demand

VIENNA (Reuters) – Austrian AT & S, a manufacturer of printed circuit boards, announced a 33 percent drop in its main profit in the first quarter, as demand from smartphone makers and the automotive sector declined. despite optimistic forecasts in the medium term.

AT & S generates most of its business with printed circuit boards for smartphones and tablets and so-called inter-circuit (IC) substrates, platforms on which electronic components are applied. These IC substrates are designed for use in high-end industrial applications, medical devices and navigation systems.

Earnings before interest and amortization (EBITDA) were 34.9 million euros in the first quarter of its 2019/20 fiscal year, with fixed revenues of 222.7 million euros, said Friday AT & S .

He confirmed his outlook for the full year of stable revenue and an EBITDA margin of 20% to 25% "although the market environment is very difficult and visibility remains low" .

AT & S shares fell 3.9%, largely reflecting the European technology sector index, which fell 2.9% after US President Donald Trump tweeted that it would impose a new tariff of 10% on Chinese imports worth $ 300 billion from September. 1.

However, AT & S has raised its medium-term forecasts and now expects a turnover that is expected to double to 2 billion euros over the next five years, having already reached 1.5 billion euros. 39; euros.

AT & S's optimism is based on the growth opportunities it sees in the new 5G telecommunications standard and in autonomous driving applications.

"Despite a flat development of smartphone unit sales for 2019, the demand for high-end motherboards and PBC (circuit board) modules will increase due to additional features such as 5G, 39, and more. artificial intelligence and sensors, "he said.

The group announced last month its intention to invest up to 1 billion euros in the next five years to expand its production capacity in Austria and build a new factory in the Chinese city of Chongqing , whose production is expected to begin by the end of 2021.

AT & S already operates two factories in Chongqing City and a factory in Shanghai.

This expansion will reduce dependencies on suppliers and serve more customers, said AT & S.