UMS Holdings

[Nick]

With the large (and growing) cash-pile, I wonder would we see an increase in dividend to 6.0 cents assuming 2H 13 performance mirrors 1H 13 ?

Does that mean the expected "breather" will not impact UMS in the short term as they have enough orders to work on? ie. impact will be in the form of lesser new orders.

The 1H 13 FCF of $13.5 million works out to 3.9 cents per share and the cash hoard of $27.4 million works out to 7.9 cents per share. So I do not think the 5 cents dividend will be affected unless UMS ends up making losses in 2H 13. The 'breather' will probably result in a drop of revenue and earning as compared to 2Q 2013. UMS semiconductor division generated $32.3 million revenue in 2Q 2013 while in 3Q 2012, it generated $21.9 million revenue. So will it drop to a similar level as 3Q 2012 ? I think we will find out when SEMI unveils the book to bill ratios in the coming weeks for the month of July. Management did highlight that the recovery will resume in 4Q 2013 so let's see how accurate their 'predictions' are. Inevitably, this is a cyclical industry so I expect profits and losses time to time.