Advanced Semiconductor Engineering, Inc. Reports Unaudited Consolidated Financial Results For The First Quarter of 2018
Advanced Semiconductor Engineering, Inc. Reports Unaudited Consolidated Financial Results For The First Quarter of 2018
TAIPEI, Taiwan, April 27, 2018 /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$64,966 million for the first quarter of 2018 (1Q18), down by 2% year-over-year and down by 23% sequentially. Net income attributable to shareholders of the parent for the quarter totaled NT$2,096 million, down from a net income attributable to shareholders of the parent of NT$2,559 million in 1Q17 and down from a net income attributable to shareholders of the parent of NT$6,246 million in 4Q17. Basic earnings per share for the quarter were NT$0.25 (or US$0.042 per ADS), compared to basic earnings per share of NT$0.33 for 1Q17 and NT$0.74 for 4Q17. Diluted earnings per share for the quarter were NT$0.24 (or US$0.041 per ADS), compared to diluted earnings per share of NT$0.29 for 1Q17 and NT$0.71 for 4Q17.
RESULTS OF OPERATIONS
1Q18 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%, 44%, 2% and 0%, respectively, of
total net revenues for the quarter.
-- Cost of revenue was NT$54,578 million for the quarter, down from
NT$69,193 million in 4Q17.
-- Raw material cost totaled NT$31,396 million for the quarter,
representing 48% of total net revenues.
-- Labor cost totaled NT$9,028 million for the quarter, representing
14% of total net revenues.
-- Depreciation, amortization and rental expenses totaled NT$6,860
million for the quarter.
-- Gross margin decreased 1.6 percentage points to 16.0% in 1Q18 from 17.6%
in 4Q17.
-- Operating margin was 6.6% in 1Q18 compared to 9.2% in 4Q17.
-- In terms of non-operating items:
-- Net interest expense was NT$357 million.
-- Net foreign exchange gain of NT$502 million was primarily
attributable to the depreciation of the U.S. dollar against the NT
dollar.
-- Loss on valuation of financial assets and liabilities was NT$379
million.
-- Net loss on equity-method investments was NT$444 million, including
NT$282 million of the share of loss from our investment in
Siliconware Precision Industries Co., Ltd.
-- Other net non-operating income of NT$138 million were primarily
related to miscellaneous income. Total non-operating expenses for
the quarter was NT$540 million.
-- Income before tax was NT$3,776 million for 1Q18, compared to NT$7,879
million in 4Q17. We recorded income tax expenses of NT$1,420 million
for the quarter, compared to NT$1,085 million in 4Q17.
-- In 1Q18, net income attributable to shareholders of the parent was
NT$2,096 million, compared to net income attributable to shareholders of
the parent of NT$2,559 million in 1Q17 and net income attributable to
shareholders of the parent of NT$6,246 million in 4Q17.
-- Our total number of shares outstanding at the end of the quarter was
8,750,192,164, including treasury stock owned by our subsidiaries. Our
1Q18 basic earnings per share of NT$0.25 (or US$0.042 per ADS) were
based on 8,479,197,895 weighted average numbers of shares outstanding in
1Q18. Our 1Q18 diluted earnings per share of NT$0.24 (or US$0.041 per
ADS) were based on 8,673,141,782 weighted average number of shares
outstanding in 1Q18.
1Q18 Results Highlights -- IC ATM[2]
-- Cost of revenues was NT$29,371 million for the quarter, down by 5%
sequentially.
-- Raw material cost totaled NT$8,704 million for the quarter,
representing 24% of total net revenues.
-- Labor cost totaled NT$7,739 million for the quarter, representing
21% of total net revenues.
-- Depreciation, amortization and rental expenses totaled NT$6,290
million for the quarter.
-- Gross margin decreased 5.2 percentage points to 20.8% in 1Q18 from 26.0%
in 4Q17.
-- Operating margin was 9.2% in 1Q18 compared to 14.4% in 4Q17.
1Q18 Results Highlights -- EMS
-- Cost of revenues for the quarter was NT$25,991 million, down by 34%
sequentially.
-- Raw material cost totaled NT$22,733 million for the quarter,
representing 79% of total net revenues.
-- Labor cost totaled NT$1,268 million for the quarter, representing 5%
of total net revenues.
-- Depreciation, amortization and rental expenses totaled NT$454
million for the quarter.
-- Gross margin increased to 9.4% in 1Q18 from 9.2% in 4Q17.
-- Operating margin decreased to 3.3% in 1Q18 from 4.3% in 4Q17.
LIQUIDITY AND CAPITAL RESOURCES
-- Capital expenditures in 1Q18 totaled US$209 million, of which US$146
million were used in packaging operations, US$54 million in testing
operations, US$7 million in EMS operations and US$2 million in
interconnect materials operations.
-- As of March 31, 2018, total unused credit lines amounted to NT$154,291
million.
-- Current ratio was 1.55 and net debt to equity ratio was 0.09 as of March
31, 2018.
-- Total number of employees was 68,985 as of March 31, 2018, compared to
68,753 as of December 31, 2017.
BUSINESS OVERVIEW
Packaging Operations[3]
-- Gross margin for our packaging operations during the quarter was 18.8%,
down by 5.1 percentage points from 4Q17.
-- Capital expenditures for our packaging operations amounted to US$146
million for the quarter, of which US$81 million were used in purchases
of wafer bumping and flip chip packaging equipment, and US$65 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$1,535 million during the quarter, down
from NT$1,645 million in 4Q17.
-- In 1Q18, gross margin for our testing operations was 30.7%, down by 5.9
percentage points from 4Q17.
-- Capital expenditures for our testing operations amounted to US$54
million during the quarter.
EMS Operations
-- In 1Q18, gross margin for our EMS operations was 9.4%, up by 0.2
percentage points from 4Q17.
-- Capital expenditures for our EMS operations amounted to US$7 million
during the quarter.
Substrate Operations
-- PBGA substrate manufactured by ASE amounted to NT$2,061 million for the
quarter, down by NT$65 million, or by 3.1% from 4Q17. Of the total
output of NT$2,061 million, NT$1,009 million was from sales to external
customers.
-- In 1Q18, 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 34% of
our total net revenues in both 1Q18 and 4Q17. No customer accounted for
more than 10% of our total net revenues in 1Q18.
-- Our top 10 customers contributed 48% of our total net revenues for the
quarter, compared to 49% in 4Q17.
-- Our customers that are integrated device manufacturers or IDMs accounted
for 46% of our total net revenues for the quarter, compared to 45% in
4Q17.
EMS Basis
-- Our five largest customers together accounted for approximately 76% of
our total net revenues in 1Q18, compared to 82% in 4Q17. One customer
accounted for more than 10% of our total net revenues in 1Q18.
-- Our top 10 customers contributed 87% of our total net revenues during
the quarter, compared to 90% in 4Q17.
OUTLOOK
Based on our current business outlook and exchange rate assumptions, management projects overall performance for the second quarter of 2018 to be as follows:
About ASE, Inc.
-- In USD term, IC-ATM 2Q18 business should be above 2Q17 levels but below
4Q17 levels;
-- Excluding foreign exchange impact, IC-ATM 2Q18 GM should be similar to
2Q17 levels;
-- EMS 2Q18 business should be between 2Q17 and 3Q17 levels;
-- EMS 2Q18 gross margin should improve slightly from 1Q18 levels.
ASE, Inc. is among the world's leading companies in semiconductor packaging and testing, 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 2017 Annual Report on Form 20-F filed on March 28, 2018.
Supplemental Financial Information
IC ATM Consolidated Operations
Amounts in NT$
Millions 1Q/18 4Q/17 1Q/17
----- ----- -----
Net Revenues 37,072 41,794 38,385
------ ------ ------
Revenues by Application
-----------------------
Communication 46% 48% 50%
------------- --- --- ---
Computer 13% 13% 11%
-------- --- --- ---
Automotive,
Consumer &
Others 41% 39% 39%
----------- --- --- ---
Packaging Operations
Amounts in NT$
Millions 1Q/18 4Q/17 1Q/17
----- ----- -----
Net Revenues 30,313 34,226 31,061
------ ------ ------
Revenues by Packaging Type
--------------------------
Bumping, Flip
Chip, WLP & SiP 32% 34% 31%
---------------- --- --- ---
IC Wirebonding 58% 55% 58%
-------------- --- --- ---
Discrete and
Others 10% 11% 11%
------------ --- --- ---
Capacity
--------
CapEx (US$
Millions)* 146 103 120
----------- --- --- ---
Number of
Wirebonders 16,015 16,076 15,963
------------ ------ ------ ------
Testing Operations
Amounts in NT$
Millions 1Q/18 4Q/17 1Q/17
----- ----- -----
Net Revenues 5,679 6,556 6,365
----- ----- -----
Revenues by Testing Type
------------------------
Final test 78% 78% 81%
---------- --- --- ---
Wafer sort 19% 19% 15%
--- --- ---
Engineering test 3% 3% 4%
--- --- ---
Capacity
--------
CapEx (US$
Millions)* 54 28 31
----------- --- --- ---
Number of Testers 3,801 3,760 3,782
----------------- ----- ----- -----
EMS Operations
Amounts in NT$
Millions 1Q/18 4Q/17 1Q/17
----- ----- -----
Net Revenues 28,691 43,289 29,363
------ ------ ------
Revenues by End Application
---------------------------
Communication 42% 42% 49%
------------- --- --- ---
Computer 17% 14% 15%
-------- --- --- ---
Consumer 24% 32% 22%
-------- --- --- ---
Industrial 9% 6% 7%
---------- --- --- ---
Automotive 7% 5% 6%
---------- --- --- ---
Others 1% 1% 1%
------ --- --- ---
Capacity
--------
CapEx (US$
Millions)* 7 7 3
----------- --- --- ---
* 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
==========================
Mar. 31 Dec. 31 Mar. 31
2018 2017 2017
Net revenues:
Packaging 29,368 33,045 29,806
Testing 5,679 6,553 6,365
Direct Material 1,009 922 892
EMS 28,686 43,285 29,355
Others 224 181 133
Total net revenues 64,966 83,986 66,551
------ ------ ------
Cost of revenues[4] (54,578) (69,193) (54,576)
Gross profit 10,388 14,793 11,975
------ ------ ------
Operating expenses:
Research and
development (2,775) (3,046) (2,763)
Selling, general and
administrative (3,297) (4,041) (3,987)
Total operating
expenses (6,072) (7,087) (6,750)
Operating income 4,316 7,706 5,225
----- ----- -----
Net non-operating (expenses) income:
Interest expense -
net (357) (318) (435)
Foreign exchange gain
(loss) 502 780 2,891
Gain (loss) on valuation of financial assets and
liabilities
(379) (216) (3,964)
Gain (loss) on
equity-method
investments[4] (444) 29 (171)
Others 138 (102) 299
Total non-operating
income (expenses) (540) 173 (1,380)
---- --- ------
Income before tax 3,776 7,879 3,845
Income tax expense (1,420) (1,085) (886)
------ ------ ----
Income from
continuing
operations and 2,356 6,794 2,959
before noncontrolling interest
Noncontrolling
interest (260) (548) (400)
---- ---- ----
Net income attributable to
shareholders of the parent
2,096 6,246 2,559
===== ===== =====
Per share data:
Earnings (losses) per share
-- Basic NT$0.25 NT$0.74 NT$0.33
-- Diluted NT$0.24 NT$0.71 NT$0.29
Earnings (losses) per equivalent ADS
-- Basic US$0.042 US$0.123 US$0.053
-- Diluted US$0.041 US$0.118 US$0.047
Number of weighted
average shares used
in 8,673,142 8,632,469 7,931,315
diluted EPS calculation (in
thousands)
Exchange rate (NT$
per US$1) 29.33 30.08 31.20
Advanced Semiconductor Engineering, Inc.
Summary of Consolidated Statement of Comprehensive Income Data - IC ATM
(In NT$ millions, except per share data)
(Unaudited)
For the three months ended
==========================
Mar. 31 Dec. 31 Mar. 31
2018 2017 2017
Net revenues:
Packaging 30,313 34,226 31,061
Testing 5,679 6,556 6,365
Direct Material 1,050 989 935
Others 30 23 24
Total net revenues 37,072 41,794 38,385
------ ------ ------
Cost of revenues[4] (29,371) (30,932) (29,552)
Gross profit 7,701 10,862 8,833
----- ------ -----
Operating expenses:
Research and
development (1,865) (2,125) (2,000)
Selling, general and
administrative (2,418) (2,736) (2,850)
Total operating
expenses (4,283) (4,861) (4,850)
Operating income 3,418 6,001 3,983
----- ----- -----
Net non-operating (expenses) income:
Interest expense -
net (407) (394) (498)
Foreign exchange gain
(loss) 685 822 2,868
Gain (loss) on valuation of financial assets
and liabilities
(502) (577) (4,072)
Gain (loss) on
equity-method
investments[4] 40 1,245 601
Others 167 2 325
Total non-operating
income (expenses) (17) 1,098 (776)
--- ----- ----
Income before tax 3,401 7,099 3,207
Income tax expense (1,250) (776) (570)
------ ---- ----
Income from
continuing
operations and 2,151 6,323 2,637
before noncontrolling interest
Noncontrolling
interest (55) (77) (78)
--- --- ---
Net income attributable to
shareholders of the parent
2,096 6,246 2,559
===== ===== =====
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
==========================
Mar. 31 Dec. 31 Mar. 31
2018 2017 2017
Net revenues:
Total net revenues 28,691 43,289 29,363
------ ------ ------
Cost of revenues (25,991) (39,287) (26,249)
Gross profit 2,700 4,002 3,114
----- ----- -----
Operating expenses:
Research and
development (926) (936) (780)
Selling, general and
administrative (832) (1,208) (1,101)
Total operating
expenses (1,758) (2,144) (1,881)
Operating income 942 1,858 1,233
--- ----- -----
Net non-operating (expenses) income:
Total non-operating
income 63 454 217
--- --- ---
Income before tax 1,005 2,312 1,450
Income tax expense (160) (324) (303)
---- ---- ----
Income from
continuing
operations and 845 1,988 1,147
before noncontrolling interest
Noncontrolling
interest (207) (500) (313)
---- ---- ----
Net income
attributable to 638
shareholders of the parent
1,488 834
Advanced Semiconductor Engineering, Inc.
Summary of Consolidated Balance Sheet Data
(In NT$ millions)
(Unaudited)
As of Mar. 31, 2018 As of Dec. 31, 2017
Current
assets:
Cash and
cash
equivalents 43,146 46,078
Financial
assets -
current 10,551 5,785
Notes and
accounts
receivable 44,246 55,201
Inventories 34,190 34,080
Others 5,869 3,794
----- -----
Total
current
assets 138,002 144,938
Financial
assets -
non current
&
Investments
-
equity
method
50,854 50,983
Property
plant and
equipment 134,637 135,169
Intangible
assets 11,334 11,341
Prepaid
lease
payments 8,943 8,851
Others 13,110 12,576
------ ------
Total assets 356,880 363,858
======= =======
Current
liabilities:
Short-term
borrowings 17,381 17,962
Current
portion of
bonds
payable - 6,161
Current
portion of
long-term
borrowings
& capital
lease
obligations
5,739 8,280
Notes and
accounts
payable 33,112 41,672
Others 32,808 31,546
------ ------
Total
current
liabilities 89,040 105,621
Bonds
payable 16,983 16,982
Long-term
borrowings
& capital
lease
obligations 34,435 27,520
Other
liabilities 10,395 9,734
------ -----
Total
liabilities 150,853 159,857
Shareholders
of the
parent 193,244 190,642
Noncontrolling
interest 12,783 13,359
------ ------
Total
liabilities
&
shareholders'
equity 356,880 363,858
======= =======
Current
Ratio 1.55 1.37
Net Debt to
Equity 0.09 0.12
[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.
[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. Therefore,
we retrospectively adjusted the
provisional amounts recognized at
the acquisition dates in May, July
and November 2016, respectively.
IR Contact:
Iris Wu, Manager US contact: Grace Teng, Manager
irissh_wu@aseglobal.com Echo Lin, Senior Associate grace_teng@aseglobal.com
Tel: +886.2.6636.5678 echolin@iselabs.com Tel: +886.2.6636.5678
http://www.aseglobal.com +1.510.687.2491
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SOURCE Advanced Semiconductor Engineering, Inc.
