(Correcting date of share price movement)

XP Power shares sank on Friday, after the company announced an anticipated downturn in its revenue over the coming year.

Shares in the Singapore-based power control system manufacturer dropped 36% to 957.00 pence each in London on Friday morning.

This followed the company’s announcement that an unusually soft demand conditions would drag its results for the year ending December 31 ‘significantly below market expectations’.

The company said that its recent order intake, revenue performance and an ongoing slowdown to the semiconductor manufacturing equipment sector indicate a likely shortfall in revenue for the year.

Customer inventory movements also provide an early indication that sales in the healthcare and industrial technology sectors will experience a decline, XP said.

XP said that these struggles may be short lived, with ‘encouraging signals’ already received by certain customers for 2025. It warned that the speed of its recovery is hard to predict, though it anticipates its 2024 results to be ‘significantly second half weighted’.

In an effort to inoculate itself from the effects of this downturn, XP said that it was undertaking significant cost saving actions, which it believes will ‘significantly lower overheads year-on-year while preserving capability to respond to the recovery when it comes’.

XP said that it ended 2023 with cash generation ahead of expectations, as reflected in its debt position of £112.7 million at December 31, and the company expects to keep debt low throughout 2024.

Despite this announcement, XP said that it remains confident in its medium-term prospects, thanks to its ‘leading market position and broad product portfolio’.

XP Power is set to release its 2023 results on March 5.

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