IQE announced that it expects revenue of between £136m and £142m, compared to the previous guidance range of £140m to £160m, including a forex tailwind of circa £3m. The board expects a mid-single digit adjusted operating loss resulting from revenues being slightly below the previous guidance range.
The company has taken measures to reduce costs and capex as the infrastructure phase of capacity expansion has been completed. The company expects net debt position at year end to be between £15m and £20m, against increased debt facilities of £57m announced in June.
The company expects a seasonally weak Q1 for 2020 and continued supply chain transitions in the wireless market. Beyond Q1 2020, the company is cautiously optimistic about a return to growth, driven by expected content gains in an expanding market for 3D sensing, demand for GaN to meet accelerating 5G infrastructure deployments and expanding Asian market opportunities for both Photonics and Wireless products as supply chains continue to localise. Thus, the company expects total revenue to return to moderate growth in 2020.
Dr Drew Nelson, IQE’s CEO, commented: “IQE has experienced very challenging market conditions in 2019. Shortfalls in revenue relate predominantly to two major customers, with whom IQE is confident it has not lost share and who remain very well positioned for returns to growth in 2020.”