Advanced Semiconductor Engineering, Inc. Reports Unaudited Consolidated Financial Results for the Third Quarter of 2017
TAIPEI, Taiwan, Oct. 27, 2017 /PRNewswire/ -- Advanced Semiconductor Engineering, Inc. (TAIEX: 2311, NYSE: ASX) ("We", "ASE", or the "Company"), among the world's leading companies in semiconductor packaging and testing, today reported unaudited net revenues([1]) of NT$73,878 million for the third quarter of 2017 (3Q17), up by 2% year-over-year and up by 12% sequentially. Net income attributable to shareholders of the parent for the quarter totaled NT$6,336 million, up from a net income attributable to shareholders of the parent of NT$5,502 million in 3Q16 and down from a net income attributable to shareholders of the parent of NT$7,847 million in 2Q17. Basic earnings per share for the quarter were NT$0.76 (or US$0.125 per ADS), compared to basic earnings per share of NT$0.72 for 3Q16 and NT$0.97 for 2Q17. Diluted earnings per share for the quarter were NT$0.69 (or US$0.115 per ADS), compared to diluted earnings per share of NT$0.64 for 3Q16 and NT$0.89 for 2Q17.
RESULTS OF OPERATIONS
3Q17 Results Highlights - Consolidated
-- Net revenue contribution from packaging operations, testing operations,
EMS operations, substrates sold to third parties and others, each
represented approximately 45%, 9%, 45%, 1% and 0%, respectively, of
total net revenues for the quarter.
-- Cost of revenue was NT$60,030 million for the quarter, up from NT$53,910
million in 2Q17.
-- Raw material cost totaled NT$36,018 million for the quarter,
representing 49% of total net revenues.
-- Labor cost totaled NT$9,110 million for the quarter, representing
12% of total net revenues.
-- Depreciation, amortization and rental expenses totaled NT$6,938
million for the quarter.
-- Gross margin increased 0.4 percentage points to 18.7% in 3Q17 from 18.3%
in 2Q17.
-- Operating margin was 9.6% in 3Q17 compared to 7.9% in 2Q17.
-- In terms of non-operating items:
-- Net interest expense was NT$350 million.
-- Net foreign exchange gain of NT$33 million was primarily
attributable to the depreciation of the U.S. dollar against the NT
dollar.
-- Gain on valuation of financial assets and liabilities was NT$598
million.
-- Net gain on equity-method investments was NT$323 million, including
NT$389 million of the share of gain from our investment in
Siliconware Precision Industries Co., Ltd. ("SPIL").
-- Other net non-operating income of NT$143 million were primarily
related to miscellaneous income. Total non-operating income for the
quarter was NT$747 million.
-- Income before tax was NT$7,815 million for 3Q17, compared to NT$11,390
million in 2Q17. We recorded income tax expenses of NT$1,083 million for
the quarter, compared to NT$3,207 million in 2Q17.
-- In 3Q17, net income attributable to shareholders of the parent was
NT$6,336 million, compared to net income attributable to shareholders of
the parent of NT$5,502 million in 3Q16 and net income attributable to
shareholders of the parent of NT$7,847 million in 2Q17.
-- Our total number of shares outstanding at the end of the quarter was
8,724,619,364, including treasury stock owned by our subsidiaries. Our
3Q17 basic earnings per share of NT$0.76 (or US$0.125 per ADS) were
based on 8,350,512,180 weighted average number of shares outstanding in
3Q17. Our 3Q17 diluted earnings per share of NT$0.69 (or US$0.115 per
ADS) were based on 8,624,804,592 weighted average number of shares
outstanding in 3Q17.
3Q17 Results Highlights - IC ATM([2])
-- Cost of revenues was NT$31,368 million for the quarter, up by 4%
sequentially.
-- Raw material cost totaled NT$9,715 million for the quarter,
representing 23% of total net revenues.
-- Labor cost totaled NT$7,870 million for the quarter, representing
19% of total net revenues.
-- Depreciation, amortization and rental expenses totaled NT$6,463
million for the quarter.
-- Gross margin increased 2 percentage points to 25.1% in 3Q17 from 23.1%
in 2Q17.
-- Operating margin was 13.7% in 3Q17 compared to 10.5% in 2Q17.
3Q17 Results Highlights - EMS
-- Cost of revenues for the quarter was NT$29,691 million, up by 18%
sequentially.
-- Raw material cost totaled NT$26,400 million for the quarter,
representing 80% of total net revenues.
-- Labor cost totaled NT$1,226 million for the quarter, representing 4%
of total net revenues.
-- Depreciation, amortization and rental expenses totaled NT$436
million for the quarter.
-- Gross margin decreased to 10.3% in 3Q17 from 11.1% in 2Q17.
-- Operating margin increased to 4.3% in 3Q17 from 4.0% in 2Q17.
LIQUIDITY AND CAPITAL RESOURCES
-- Capital expenditures in 3Q17 totaled US$130 million, of which
US$84million were used in packaging operations, US$29 million in testing
operations, US$13 million in EMS operations and US$4 million in
interconnect materials operations.
-- As of September 30, 2017, total unused credit lines amounted to
NT$165,583 million.
-- Current ratio was 1.37 and net debt to equity ratio was 0.20 as of
September 30, 2017.
-- Total number of employees was 68,227 as of September 30, 2017, compared
to 66,996 as of June 30, 2017.
BUSINESS REVIEW
Packaging Operations([3])
-- Gross margin for our packaging operations during the quarter was 22.3%,
up by 1.7 percentage points from 2Q17.
-- Capital expenditures for our packaging operations amounted to US$84
million for the quarter, of which US$30 million were used in purchases
of wafer bumping and flip chip packaging equipment, and US$54 million
were used in purchase of common equipment, SiP equipment and wirebond
packaging equipment.
Testing Operations
-- Depreciation, amortization and rental expense associated with our
testing operations amounted to NT$1,659 million during the quarter, down
from NT$1,673 million in 2Q17.
-- Gross margin for our testing operations amounted to 37.8% during the
quarter, up by 3.6 percentage points from 2Q17.
-- Capital expenditures for our testing operations amounted to US$29
million during the quarter.
EMS Operations
-- Gross margin for our EMS operations amounted to 10.3% during the
quarter, down by 0.8 percentage points from 2Q17.
-- Capital expenditures for our EMS operations amounted to US$13 million
during the quarter.
Substrate Operations
-- PBGA substrate manufactured by ASE amounted to NT$2,178 million for the
quarter, up by NT$34 million, or by 2% from 2Q17. Of the total output of
NT$2,178 million, NT$948 million was from sales to external customers.
-- Gross margin for substrate operations was 13.1% for the quarter, down by
1.3 percentage points from 2Q17.
-- In 3Q17, our internal substrate manufacturing operations supplied 25%
(by value) of our total substrate requirements.
Customers
IC ATM consolidated Basis
-- Our five largest customers together accounted for approximately 36% of
our total net revenues for the quarter and in 2Q17. One customer
accounted for more than 10% of our total net revenues in 3Q17.
-- Our top 10 customers contributed 50% of our total net revenues for the
quarter, compared to 51% in 2Q17.
-- Our customers that are integrated device manufacturers, or IDMs,
accounted for 44% of our total net revenues for the quarter, compared to
43% in 2Q17.
EMS BASIS
-- Our five largest customers together accounted for approximately 80% of
our total net revenues in 3Q17, compared to 79% in 2Q17. One customer
accounted for more than 10% of our total net revenues in 3Q17.
-- Our top 10 customers contributed 89% of our total net revenues during
the quarter, which remained the same as 2Q17.
OUTLOOK
Based on our current business outlook and exchange rate assumptions, management projects overall performance for the fourth quarter of 2017 to be as follows:
-- IC ATM 4Q17 business and gross margin should both be similar with 3Q17
level;
-- EMS 4Q17 business should be similar with IC ATM 4Q17 level;
-- EMS 4Q17 gross margin should be above 1Q16 level.
[1] All financial information
presented in this press release is
unaudited, consolidated and prepared
in accordance with Taiwan-IFRS
(International Financial Reporting
Standards as endorsed for use in the
R.O.C.). Such financial information
is generated internally by us and
has not been subjected to the same
review and scrutiny, including
internal auditing procedures and
audit by our independent auditors,
to which we subject our audited
consolidated financial statements,
and may vary materially from the
audited consolidated financial
information for the same period.
Any evaluation of the financial
information presented in this press
release should also take into
account our published audited
consolidated financial statements
and the notes to those statements.
In addition, the financial
information presented is not
necessarily indicative of our
results of operations for any future
period.
[2] ATM stands for Semiconductor
Assembly, Testing and Material.
[3] IC packaging services include
module assembly services.
About ASE, Inc.
ASE is among the world's leading companies in semiconductor packaging and testing sector, including front-end engineering testing, wafer probing and final testing services. With advanced technological capabilities and a global presence spanning Taiwan, China, Korea, Japan, Singapore, Malaysia and the United States, ASE, Inc. has established a reputation for reliable, high quality products and services. For more information, please visit our website at http://www.aseglobal.com.
Safe Harbor Notice
This press release contains "forward-looking statements" within the meaning of Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended. Although these forward-looking statements, which may include statements regarding our future results of operations, financial condition or business prospects, are based on our own information and information from other sources we believe to be reliable, you should not place undue reliance on these forward-looking statements, which apply only as of the date of this press release. The words "anticipate," "believe," "estimate," "expect," "intend," "plan" and similar expressions, as they relate to us, are intended to identify these forward-looking statements in this press release. Our actual results of operations, financial condition or business prospects may differ materially from those expressed or implied in these forward-looking statements for a variety of reasons, including risks associated with cyclicality and market conditions in the semiconductor or electronic industry; changes in our regulatory environment, including our ability to comply with new or stricter environmental regulations and to resolve environmental liabilities; demand for the outsourced semiconductor packaging, testing and electronic manufacturing services we offer and for such outsourced services generally; the highly competitive semiconductor or manufacturing industry we are involved in; our ability to introduce new technologies in order to remain competitive; international business activities; our business strategy; our future expansion plans and capital expenditures; the uncertainties as to whether we can complete the share exchange contemplated by a joint share exchange agreement between Siliconware Precision Industries Co., Ltd. and us; the strained relationship between the Republic of China and the People's Republic of China; general economic and political conditions; the recent global economic crisis; possible disruptions in commercial activities caused by natural or human-induced disasters; fluctuations in foreign currency exchange rates; and other factors. For a discussion of these risks and other factors, please see the documents we file from time to time with the Securities and Exchange Commission, including our 2016 Annual Report on Form 20-F filed on April 21, 2017.
Supplemental Financial Information
IC ATM Consolidated Operations
Amounts in NT$
Millions 3Q/17 2Q/17 3Q/16
----- ----- -----
Net Revenues 41,854 39,048 43,006
------ ------ ------
Revenues by Application
-----------------------
Communication 49% 48% 53%
------------- --- --- ---
Computer 10% 11% 12%
-------- --- --- ---
Automotive,
Consumer &
Others 41% 41% 35%
----------- --- --- ---
Packaging Operations
Amounts in NT$
Millions 3Q/17 2Q/17 3Q/16
----- ----- -----
Net Revenues 33,897 31,718 34,832
------ ------ ------
Revenues by Packaging Type
--------------------------
Bumping, Flip
Chip, WLP & SiP 32% 31% 33%
---------------- --- --- ---
IC Wirebonding 57% 58% 57%
-------------- --- --- ---
Discrete and
Others 11% 11% 10%
------------ --- --- ---
Capacity
--------
CapEx (US$
Millions)* 84 161 112
----------- --- --- ---
Number of
Wirebonders 16,083 16,118 15,905
------------ ------ ------ ------
Testing Operations
Amounts in NT$
Millions 3Q/17 2Q/17 3Q/16
----- ----- -----
Net Revenues 6,889 6,350 7,232
----- ----- -----
Revenues by Testing Type
------------------------
Final test 79% 83% 75%
---------- --- --- ---
Wafer sort 18% 14% 21%
--- --- ---
Engineering test 3% 3% 4%
--- --- ---
Capacity
--------
CapEx (US$
Millions)* 29 47 57
----------- --- --- ---
Number of
Testers 3,739 3,796 3,725
--------- ----- ----- -----
EMS Operations
Amounts in NT$
Millions 3Q/17 2Q/17 3Q/16
----- ----- -----
Net Revenues 33,100 28,248 31,190
------ ------ ------
Revenues by End Application
---------------------------
Communication 45% 48% 51%
------------- --- --- ---
Computer 14% 17% 16%
-------- --- --- ---
Consumer 26% 20% 20%
-------- --- --- ---
Industrial 8% 8% 7%
---------- --- --- ---
Automotive 6% 6% 5%
---------- --- --- ---
Others 1% 1% 1%
------ --- --- ---
Capacity
--------
CapEx (US$
Millions)* 13 4 10
----------- --- --- ---
* Capital expenditure excludes building construction costs.
Advanced Semiconductor Engineering, Inc.
Summary of Consolidated Statement of Comprehensive Income Data
(In NT$ millions, except per share data)
(Unaudited)
For the three months ended For the nine months ended
========================== =========================
Sep. 30 Jun. 30 Sep. 30 Sep. 30 Sep. 30
2017 2017 2016 2017 2016
Net revenues:
Packaging 32,880 30,494 33,449 93,180 91,663
Testing 6,889 6,350 7,231 19,604 19,729
Direct Material 948 928 805 2,768 2,456
EMS 33,098 28,210 31,174 90,663 80,768
Others 63 44 125 240 3,140
Total net revenues 73,878 66,026 72,784 206,455 197,756
------ ------ ------ ------- -------
Cost of revenues4 (60,030) (53,910) (58,673) (168,516) (159,943)
Gross profit 13,848 12,116 14,111 37,939 37,813
------ ------ ------ ------ ------
Operating expenses:
Research and development (2,986) (2,952) (2,947) (8,701) (8,300)
Selling, general and administrative4 (3,794) (3,945) (3,728) (11,726) (10,983)
Total operating expenses (6,780) (6,897) (6,675) (20,427) (19,283)
Operating income 7,068 5,219 7,436 17,512 18,530
----- ----- ----- ------ ------
Net non-operating (expenses) income:
Interest expense - net (350) (365) (478) (1,150) (1,536)
Foreign exchange gain (loss) 33 (201) 1,593 2,723 2,236
Gain (loss) on valuation of financial assets 598 800 (1,998) (2,566) (1,500)
and liabilities
Gain (loss) on equity-method investments4 323 253 454 405 1,098
Others 143 5,684 (137) 6,126 (504)
Total non-operating income (expenses) 747 6,171 (566) 5,538 (206)
--- ----- ---- ----- ----
Income before tax 7,815 11,390 6,870 23,050 18,324
Income tax expense (1,083) (3,207) (976) (5,176) (3,817)
------ ------ ---- ------ ------
Income from continuing operations and 6,732 8,183 5,894 17,874 14,507
before non-controlling interest
Non-controlling interest (396) (336) (392) (1,132) (821)
---- ---- ---- ------ ----
Net income attributable to
shareholders of the parent
6,336 7,847 5,502 16,742 13,686
===== ===== ===== ====== ======
Per share data:
Earnings (losses) per share
- Basic NT$0.76 NT$0.97 NT$0.72 NT$2.08 NT$1.79
- Diluted NT$0.69 NT$0.89 NT$0.64 NT$1.89 NT$1.50
Earnings (losses) per equivalent ADS
- Basic US$0.125 US$0.160 US$0.113 US$0.340 US$0.276
- Diluted US$0.115 US$0.148 US$0.101 US$0.310 US$0.231
Number of weighted average shares used in 8,624,804 8,604,623 8,252,369 8,266,095 8,272,939
diluted EPS calculation (in thousands)
Exchange rate (NT$ per US$1) 30.22 30.18 31.78 30.54 32.42
[4] As of September 30, 2017,
we have completed the
identification of the
difference between the cost
of the investment and our
share of the net fair value
of subsidiary and associates'
identifiable assets and
liabilities. Accordingly, we
retrospectively adjusted the
provisional amounts
recognized at the acquisition
dates in May , July and
November 2016, respectively.
Advanced Semiconductor Engineering, Inc.
Summary of Consolidated Statement of Comprehensive Income Data - IC ATM
(In NT$ millions, except per share data)
(Unaudited)
For the three months ended For the nine months
ended
========================== ===================
Sep. 30 Jun. 30 Sep. 30 Sep. 30 Sep. 30
2017 2017 2016 2017 2016
Net revenues:
Packaging 33,897 31,718 34,832 96,676 94,609
Testing 6,889 6,350 7,232 19,604 19,729
Direct Material 1,048 960 920 2,943 2,652
Others 20 20 22 64 63
Total net revenues 41,854 39,048 43,006 119,287 117,053
------ ------ ------ ------- -------
Cost of revenues4 (31,368) (30,021) (32,040) (90,941) (88,696)
Gross profit 10,486 9,027 10,966 28,346 28,357
------ ----- ------ ------ ------
Operating expenses:
Research and development (2,123) (2,113) (2,130) (6,236) (6,073)
Selling, general and administrative4 (2,639) (2,812) (2,646) (8,301) (7,957)
Total operating expenses (4,762) (4,925) (4,776) (14,537) (14,030)
Operating income 5,724 4,102 6,190 13,809 14,327
----- ----- ----- ------ ------
Net non-operating (expenses) income:
Interest expense - net (416) (443) (525) (1,357) (1,705)
Foreign exchange gain (loss) 129 (162) 1,504 2,835 2,032
Gain (loss) on valuation of financial assets
and liabilities
365 522 (1,987) (3,185) (1,420)
Gain (loss) on equity-method investments4 1,249 5,410 1,284 7,260 3,577
Others 154 33 (152) 512 (425)
Total non-operating income (expenses) 1,481 5,360 124 6,065 2,059
----- ----- --- ----- -----
Income before tax 7,205 9,462 6,314 19,874 16,386
Income tax expense (784) (1,541) (719) (2,895) (2,514)
---- ------ ---- ------ ------
Income from continuing operations and 6,421 7,921 5,595 16,979 13,872
before non-controlling interest
Non-controlling interest (85) (74) (93) (237) (186)
--- --- --- ---- ----
Net income attributable to
shareholders of the parent
6,336 7,847 5,502 16,742 13,686
===== ===== ===== ====== ======
Advanced Semiconductor Engineering, Inc.
Summary of Consolidated Statement of Comprehensive Income Data - EMS
(In NT$ millions, except per share data)
(Unaudited)
For the three months ended For the nine months
ended
========================== ===================
Sep. 30 Jun. 30 Sep. 30 Sep. 30 Sep. 30
2017 2017 2016 2017 2016
Net revenues:
Total net revenues 33,100 28,248 31,190 90,711 80,864
------ ------ ------ ------ ------
Cost of revenues (29,691) (25,127) (28,066) (81,067) (73,173)
Gross profit 3,409 3,121 3,124 9,644 7,691
----- ----- ----- ----- -----
Operating expenses:
Research and development (877) (859) (841) (2,516) (2,293)
Selling, general and administrative (1,101) (1,126) (1,053) (3,328) (2,969)
Total operating expenses (1,978) (1,985) (1,894) (5,844) (5,262)
Operating income 1,431 1,136 1,230 3,800 2,429
----- ----- ----- ----- -----
Net non-operating (expenses) income:
Total non-operating income 235 366 224 818 492
--- --- --- --- ---
Income before tax 1,666 1,502 1,454 4,618 2,921
Income tax expense (293) (284) (249) (880) (535)
---- ---- ---- ---- ----
Income from continuing operations and 1,373 1,218 1,205 3,738 2,386
before non-controlling interest
Non-controlling interest (338) (289) (289) (940) (601)
---- ---- ---- ---- ----
Net income attributable to
shareholders of the parent 1,035 929 916 2,798 1,785
===== === === ===== =====
Advanced Semiconductor Engineering, Inc.
Summary of Consolidated Balance Sheet Data
(In NT$ millions)
(Unaudited)
As of Sep. 30, 2017 As of Jun. 30, 2017
=================== ===================
Current assets:
Cash and cash equivalents 38,975 43,891
Financial assets - current 3,989 4,138
Notes and accounts receivable 51,830 46,156
Inventories 37,266 42,818
Others 7,852 10,001
----- ------
Total current assets 139,912 147,004
Financial assets - non current & Investments -
equity method
51,107 50,878
Property plant and equipment 136,982 140,378
Intangible assets 11,830 11,885
Prepaid lease payments 7,810 2,065
Others 12,358 4,413
------ -----
Total assets 359,999 356,623
======= =======
Current liabilities:
Short-term borrowings 19,638 14,209
Current portion of bonds payable 6,137 15,236
Current portion of long-term borrowings & capital
lease obligations
6,882 7,454
Notes and accounts payable 41,077 32,471
Others 28,665 43,765
------ ------
Total current liabilities 102,399 113,135
Bonds payable 16,981 25,845
Long-term borrowings & capital lease obligations 32,908 28,823
Other liabilities 9,755 9,757
----- -----
Total liabilities 162,043 177,560
Shareholders of the parent 185,160 166,838
Non-controlling interest 12,796 12,225
Total liabilities & shareholders' equity 359,999 356,623
======= =======
Current Ratio 1.37 1.30
Net Debt to Equity 0.20 0.24
IR Contact:
Iris Wu, Manager Grace Teng, Manager
irissh_wu@aseglobal.com grace_teng@aseglobal.com
Tel: +886.2.6636.5678 Tel: +886.2.6636.5678
http://www.aseglobal.com
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SOURCE Advanced Semiconductor Engineering, Inc.
