(Reuters) - German chip equipment supplier Siltronic reported a 27.5% drop in first-quarter core profit on Thursday, a week after it slashed annual targets due to customers' still high inventories.
The company, which makes silicon wafers used in semiconductor chips, posted quarterly earnings before interest, tax, depreciation and amortisation (EBITDA) of 90.8 million euros ($97.3 million), down from 125.2 million euros a year earlier.
Its sales fell 15% to 343.5 million euros in the same period.
"The start of the year continues to be characterized by weak demand due to increased inventories at our customers. It is still not possible to predict when inventories will return to a normal level," CEO Michael Heckmeier said in a statement.
Because of this, 2024 will likely be a transition year for Siltronic on the way to profitable growth, he added.
The company said that while demand for wafers was increasing in the end markets, customers' slower than expected inventory reductions would continue of affect it throughout the year.
Siltronic cut its 2024 outlook last week, expecting 2024 sales to be roughly 10% below those of last year, while full-year EBITDA is expected to be below 300 million euros.
($1 = 0.9329 euros)