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Components | January 10, 2012

STATS ChipPAC affirms outlook for 4Q2011

STATS ChipPAC Ltd. affirms its outlook for the fourth quarter of 2011.
As announced on 18 October 2011, STATS ChipPAC (Thailand ) Ltd. has been suspended since 17 October 2011 due to the flood in Thailand.

As the flood water level is receding in the Navanakorn Industrial Estaten (as of December statement), the company has been able to gain access to the Thailand Plant and is in the process of assessing damages, evaluating recoverability of assets and planning restoration of the Thailand Plant for production.

The company is as yet unable to determine when full operations might resume at the Thailand Plant, and currently expects the Thailand Plant to remain suspended through January 2012, with partial factory operation in the first quarter of 2012.

Meanwhile, the company has set up a global support and recovery management team and engaged equipment restoration specialists to expedite the restoration of the Thailand Plant. The company has also shifted production to its other manufacturing sites to support demand from its customers that are affected by the disruption of the Thailand Plant operations.

Despite that, the company affirms its current outlook of net revenues in the fourth quarter of 2011 to be single digit decrease from prior quarter, with adjusted EBITDA in the range of 20% to 25% of revenue, and capital expenditure to be approximately $50 million to $60 million.

The Thailand Plant suspension from 17 October 2011 to the end of December 2011 is expected to account for approximately 7% reduction in revenue for the fourth quarter of 2011 compared to the third quarter of 2011.

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