SFA Semicon Philippines Corp. (SSPC) on Monday said it received P20.11 million from the government as part of an incentive program that allows for discounted power rates.
In a disclosure to the stock exchange on Tuesday, the local arm of one of Samsung Electronics Co. Ltd.’s South Korean suppliers said the amount is part of a discounted electricity incentive granted under Executive Order No. 856 (EO 856) and its lease agreement with Clark Development Corp.
EO 856 states that the government must support the power infrastructure requirements of Clark Freeport Zone. SSPC’s manufacturing plant is located at the Clark Freeport Zone in Pampanga.
The discounted power rate program is part of government’s efforts to support power-intensive industries to lure foreign investors to invest in the country.
SSPC said the payment will boost its cash and cash equivalents by some $390,000.
The company reported its net income declined by 71% to $1.83 million in 2017, amid stiff competition and a 29% rise in costs.
“The increased direct costs and relatively low average selling prices resulted in the 54% decline in gross profit declined from $15.40 million to $6.70 million during the year in review,” SSPC previously said.
A wholly owned subsidiary of Korea-based firm STS Semiconductor and Telecommunications Co., Ltd., SSPC has a business transaction agreement to supply its products to Samsung Electronics Co., Ltd. until May 2019. — Janina C. Lim