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Macronix Continues Dividend Payouts Despite Operational Losses

Amid a semiconductor downturn, Macronix plans a 0.5 yuan per share dividend, marking six years of uninterrupted payouts
Taiwan
m 2337.TW Mid and Small Cap 2000
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Macronix International Co., Ltd. announced late March that it will distribute a cash dividend of 0.5 yuan per share. In doing so, the leading non-volatile memory integrated device manufacturer extended its string of annual dividend payments to six straight years. The dividend came on the back of a challenging year, in which Macronix recorded an after-tax loss of 0.92 yuan per share. The decision to declare the dividend arrived during a tough stretch for the semiconductor sector, as Macronix saw revenue contract to 27.624 billion yuan from 43.001 billion in the previous corresponding period, a 36% year-over-year decrease. The company’s gross profit margin contracted to 24.5%, from 24.9% in the year-ago period.

In the 12 months ended Dec. 31, the semiconductor concern revealed an operating loss of 1.699 billion yuan, as sales for its three principal memory product lines and wafer foundry services all posted declines from 2019’s respective tallies. In light of these headwinds, it is noteworthy that Macronix’s board opted to follow through with the payout to common stockholders, highlighting its resolve to create value for shareholders. The forward dividend yield is roughly 1.77%, based on the March 28 closing stock price of 28.2 yuan.

The company’s board also gave their blessing to a pair of proposals aimed at shoring up its balance sheet through an assortment of local and overseas investment strategies. The first initiative involves the proposed cash capital increase and the issuance of new shares, with the number limited to 360 million and a provision for placement by private subscription of up to 180 million.

Administration forecasts that lackluster demand will persist through the next quarter and factory use is expected to remain low, complicating the ongoing inventory dilemma. Nonetheless, they indicated that utilization rates in the second quarter will be informed by the pace of inventory drawdown and the subsequent movement in what would be a healing market. Though it is seen that the balance of risks faces modest improvement, the company is bracing for what will likely be another difficult year, suggesting a prudent read on the uncertain path ahead for the semiconductor industry.

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