Published by Global Banking and Finance Review
Posted on February 5, 2025
By Nathan Vifflin
(Reuters) - Melexis, Belgium's largest semiconductor supplier, on Wednesday forecast lower margin and sales for the first half of 2025, sending its shares to nearly five-year lows, as inventory corrections by automotive clients continue into the new year.
Melexis, whose automotive semiconductor business made up 90% of its total sales in 2024, counts Tesla and Chinese carmakers BYD and NIO among its customers.
The company expects its operating margin to be around 16% in the first half of the year, down from 26.3% in the same period in 2024.
It sees half year sales of around 400 million euros ($415.4 million), compared with 487.5 million euros last year. Sales in the first quarter should be in a range of 190 million to 200 million euros, it said.
"While customer inventory corrections are continuing in the first half of the year, we are cautiously optimistic that customer demand will start to improve around the summer," Melexis said in an earnings statement.
The shares fell as much as 14.7% to 52.65 euros in early trading, their lowest price since mid-May 2020, and were down 10% as of 0842 GMT, at the bottom of Brussels' main index BEL20.
Melexis did not provide a detailed guidance for full year sales or earnings, but said the sales were expected to pick up significantly in the second half of 2025.
Michael Roeg, an analyst at Degroof Petercam, said the results and outlook were well below market expectations across the board, and added investors would be looking at the management's confidence regarding the second half improvement during the post-earnings call, scheduled to start at 0930 GMT.
Melexis' fourth quarter operating margin was 14.0% on sales of 197.4 million euros. Analyst were expecting a 18.6% margin and sales of 205.4 million, a company-compiled poll showed.
The company said it expected to spend around 50 million euros in capital expenditures in 2025, down from 60.6 million last year and 94.8 million in 2023.
($1 = 0.9629 euros)
(Reporting by Nathan Vifflin in Gdansk, editing by Milla Nissi)
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