Announcing its unaudited results for FY Q3 2008-09, SPEL Semiconductor Limited reported revenues of Rs.193.1 lakhs with a PBT of Rs.49.06 lakhs and PAT of Rs.8.18 lakhs. Compared to the corresponding quarter of the last fiscal, Revenues grew by 8% from Rs.179.1 lakhs. In spite of the global recession, SPEL was able to sustain PAT due to implementation of various cost reduction measures.

During the quarter there was steep drop in demand for Computing, Consumer Electronics & Communications products. This hence brought down the demand for semiconductors which was visible across the worldwide semiconductor industry.

Coupled with this, the power cost also increased drastically due to severe power supply restrictions leading to frequent use of our DG sets. Booking of forward exchange contract losses also affected the results. These contracts were towards ForEx contracts that were signed during early 2008 when the Rupee was appreciating. There is however no further ForEx cover for FY 2008-09.

Being compliant with SEBI norms though ESOS 2007 related expenses were booked, considering the present stock market conditions Employees exercising their ESOS is remote. If this exercising does not happen, then the booked expenses would get reversed. Also, continuous focus on cost reduction models & adoption of latest Lean Manufacturing practices are expected to yield results from FY Q4 2008-09. These are expected to improve the annual results.

September marked the start of the 11th semiconductor industry downturn. According to industry analysts, there was -4% drop for 2008 compared to 2007. The industry is expected to stabilize during the FY Q2 2009-10. But the recovery should start to kick in by FY Q3 2009-10, making the full-year market down ~17% on a year-on-year basis.

SPEL proposes to invest an additional $7 million in its capacity expansion to capitalize on the expected industry upturn during FY Q3 2009-10. This would increase revenues by Rs.35 crores on a full year basis. The sustained performance will drive SPEL to further excel due to the strong demand experienced by its existing Customers, thereby making the outlook bright.

Continuing to be India’s first & only IC Assembly & Test Company, SPEL has been constantly exceeding expectations. SPEL is committed to firmly establishing itself as the Natural Destination for global Customers seeking cost effective Assembly & Test services.