MUNICH (dpa-AFX) - Persistently weak demand has weighed on semiconductor wafer manufacturer Siltronic at the start of the year. Many customers are holding back on orders due to high inventories. "It is still not clear when inventories will return to a normal level," said Siltronic CEO Michael Heckmeier in a statement issued in Munich on Thursday.

Sales in the first quarter fell by 15 percent year-on-year to 343.5 million euros. Of this, 26.4 percent remained as earnings before interest, taxes, depreciation and amortization (EBITDA). In absolute terms, this operating result fell by 27.5 percent to 90.8 million euros. On the bottom line, the Wacker Chemie subsidiary earned EUR 27.7 million - compared to EUR 72.5 million a year ago.

In view of the weak demand and low expectations, the company has made a good start to the year, wrote analyst Constantin Hesse of investment house Jefferies in an initial reaction. The surprisingly good development of net profit is probably also due to the postponement of depreciation on the new wafer factory in Singapore.

In the course of lowering its annual targets for sales and operating profit margin at the end of last week, Siltronic had announced that depreciation on the new production facility had been postponed. Due to the continuing weakness in demand, some customer qualifications would take place later in the year. These approvals of the systems by customers are decisive for the start of depreciation of the new factory, which will probably be postponed to the fourth quarter.

Due to its customers' reluctance to buy, Siltronic is now planning for a decline in sales of around ten percent and an earnings margin before interest, taxes, depreciation and amortization (EBITDA) of 21 to 25 percent in 2024. Previously, the company had forecast sales and an operating margin in the region of the previous year. Start-up costs for a new factory could have additionally impacted the margin by up to three percentage points. In 2023, the company had generated sales of over 1.5 billion euros and an operating margin of 28.7 percent.

The capping of the forecast had also raised concerns among some investors with regard to the MDax group's capital resources. However, CFO Claudia Schmitt said in a conference call with analysts that no capital increase was planned for this year.

Siltronic shares lost almost one percent to 72.45 euros by lunchtime. Before the profit warning on Friday, they had still cost around 79 euros./mis/stw/jha/