ASE Technology Holding Co., Ltd. Reports Unaudited Consolidated Financial Results for the Second Quarter of 2018
TAIPEI, Taiwan, July 27, 2018 /PRNewswire/ -- ASE Technology Holding Co., Ltd. (TAIEX: 3711, NYSE: ASX) ("We", "ASEH", or the "Company") was jointly established by Advanced Semiconductor Engineering, Inc. ("ASE") and Siliconware Precision Industries Co., Ltd. ("SPIL") on April 30, 2018. The financial results for second quarter of 2018 (2Q18) reflect operations of ASE starting from April 1, 2018 and operations of ASEH starting from April 30, 2018. The financial results for 1Q2018 and 2Q2017 reflect the operations of ASE and its subsidiaries prior to the establishment of the Company. As a result, the Company's financial results for 2Q18 may not be comparable to those of 1Q2018 and 2Q2017. ASEH, the leading provider of semiconductor manufacturing services in assembly and test, today reported unaudited net revenues[1] of NT$84,501 million for 2Q18, up by 28% year-over-year and up by 30% sequentially. Net income attributable to shareholders of the parent for the quarter totaled NT$11,463 million, up from a net income attributable to shareholders of the parent of NT$7,847 million in 2Q17 and up from a net income attributable to shareholders of the parent of NT$2,096 million in 1Q18. Basic earnings per share for the quarter were NT$2.70 (or US$0.183 per ADS), compared to adjusted basic earnings per share of NT$1.93 for 2Q17 and NT$0.49 for 1Q18. Diluted earnings per share for the quarter were NT$2.69 (or US$0.182 per ADS), compared to adjusted diluted earnings per share of NT$1.78 for 2Q17 and NT$0.48 for 1Q18.
[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.
RESULTS OF OPERATIONS
2Q18 Results Highlights - Consolidated
-- Net revenue contribution from packaging operations, testing operations,
EMS operations and others, each represented approximately 52%, 10%, 36%
and 2%, respectively, of total net revenues for the quarter.
-- Cost of revenue was NT$70,791 million for the quarter, up from NT$54,578
million in 1Q18.
-- Raw material cost totaled NT$39,107 million for the quarter,
representing 46% of total net revenues.
-- Labor cost totaled NT$11,673 million for the quarter, representing
14% of total net revenues.
-- Depreciation, amortization and rental expenses totaled NT$10,196
million for the quarter.
-- Gross margin increased 0.2 percentage points to 16.2% in 2Q18 from 16.0%
in 1Q18.
-- Operating margin was 6.4% in 2Q18 compared to 6.6% in 1Q18.
-- In terms of non-operating items:
-- Net interest expense was NT$819 million.
-- Net foreign exchange loss of NT$1,469 million was primarily
attributable to the appreciation of U.S. dollar against NT dollar.
-- Gain on valuation of financial assets and liabilities was NT$2,341
million.
-- Net loss on equity-method investments was NT$201 million, including
NT$67 million of the share of loss from our investment in
Siliconware Precision Industries Co., Ltd. in April when it was
accounted for using the equity method before the establishment of
the Company.
-- Other net non-operating income of NT$7,681 million were primarily
attributable to gain on revaluation of acquired subsidiary and
miscellaneous income. Total non-operating income for the quarter
was NT$7,533 million.
-- Income before tax was NT$12,920 million for 2Q18, compared to NT$3,776
million in 1Q18. We recorded income tax expenses of NT$1,268 million
for the quarter, compared to NT$1,420 million in 1Q18.
-- In 2Q18, net income attributable to shareholders of the parent was
NT$11,463 million, compared to net income attributable to shareholders
of the parent of NT$7,847 million in 2Q17 and net income attributable to
shareholders of the parent of NT$2,096 million in 1Q18.
-- Our total number of shares outstanding at the end of the quarter was
4,319,237,132, including treasury stock owned by our subsidiaries. Our
2Q18 basic earnings per share of NT$2.70 (or US$0.183 per ADS) were
based on 4,246,028,841 weighted average numbers of shares outstanding in
2Q18. Our 2Q18 diluted earnings per share of NT$2.69 (or US$0.182 per
ADS) were based on 4,252,766,558 weighted average number of shares
outstanding in 2Q18.
2Q18 Results Highlights - ATM[2]
-- Cost of revenues was NT$43,689 million for the quarter, up by 49%
sequentially.
-- Raw material cost totaled NT$14,986 million for the quarter,
representing 27% of total net revenues.
-- Labor cost totaled NT$10,266 million for the quarter, representing
19% of total net revenues.
-- Depreciation, amortization and rental expenses totaled NT$9,628
million for the quarter.
-- Gross margin decreased 0.9 percentage points to 19.9% in 2Q18 from 20.8%
in 1Q18.
-- Operating margin was 8.4% in 2Q18 compared to 9.2% in 1Q18.
2Q18 Results Highlights - EMS
-- Cost of revenues for the quarter was NT$27,608 million, up by 6%
sequentially.
-- Raw material cost totaled NT$24,269 million for the quarter,
representing 80% of total net revenues.
-- Labor cost totaled NT$1,386 million for the quarter, representing 5%
of total net revenues.
-- Depreciation, amortization and rental expenses totaled NT$452
million for the quarter.
-- Gross margin were both 9.4% in 2Q18 and 1Q18.
-- Operating margin decreased to 2.7% in 2Q18 from 3.3% in 1Q18.
[2] ATM stands for Semiconductor
Assembly, Testing and Material.
LIQUIDITY AND CAPITAL RESOURCES
-- Capital expenditures in 2Q18 totaled US$336 million, of which US$193
million were used in packaging operations, US$115 million in testing
operations, US$19 million in EMS operations and US$9 million in
interconnect materials operations.
-- As of June 30, 2018, total unused credit lines amounted to NT$135,603
million.
-- Current ratio was 1.11 and net debt to equity ratio was 0.62 as of June
30, 2018.
-- Total number of employees was 93,664 as of June 30, 2018, compared to
68,985 as of March 31, 2018.
Business Review
Customers
ATM consolidated Basis
-- Our five largest customers together accounted for approximately 39% of
our total net revenues in 2Q18, compared to 34% in 1Q18. One customer
accounted for more than 10% of our total net revenues in 2Q18.
-- Our top 10 customers contributed 52% of our total net revenues for the
quarter, compared to 48% in 1Q18.
-- Our customers that are integrated device manufacturers or IDMs accounted
for 37% of our total net revenues for the quarter, compared to 46% in
1Q18.
EMS Basis
-- Our five largest customers together accounted for approximately 75% of
our total net revenues in 2Q18, compared to 76% in 1Q18. One customer
accounted for more than 10% of our total net revenues in 2Q18.
-- Our top 10 customers contributed 87% of our total net revenues during
the quarter both in 2Q18 and 1Q18.
About ASE Technology Holding Co., Ltd. ("ASEH")
ASEH is the leading provider of semiconductor manufacturing services in assembly and test. The Company develops and offers complete turnkey solutions covering front-end engineering test, wafer probing and final test, as well as IC packaging, materials and electronic manufacturing services through USI with superior technologies, breakthrough innovations, and advanced development programs. With advanced technological capabilities and a global presence spanning Taiwan, China, South Korea, Japan, Singapore, Malaysia and Mexico as well as the United States and Europe, ASEH 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 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 the 2017 Annual Report on Form 20-F for our predecessor company, Advanced Semiconductor Engineering, Inc., filed on March 28, 2018.
Supplemental Financial Information
Consolidated Operations
2Q/18 1Q/18 2Q/17
----- ----- -----
EBITDA (NT$
Millions) 24,893 11,893 19,085
----------- ------ ------ ------
ATM Consolidated Operations
2Q/18 1Q/18 2Q/17
----- ----- -----
Net Revenues
(NT$ Millions) 54,534 37,072 39,048
--------------- ------ ------ ------
Revenues by Application
-----------------------
Communication 51% 46% 48%
------------- --- --- ---
Computer 15% 13% 11%
-------- --- --- ---
Automotive,
Consumer &
Others 34% 41% 41%
----------- --- --- ---
Revenues by Type
----------------
Bumping, Flip
Chip, WLP & SiP 29% 26% 26%
---------------- --- --- ---
Wirebonding 46% 47% 47%
----------- --- --- ---
Discrete and
Others 7% 9% 9%
------------ --- --- ---
Testing 16% 15% 16%
------- --- --- ---
Material 2% 3% 2%
-------- --- --- ---
Capacity & EBITDA
-----------------
CapEx (US$
Millions)* 317 202 209
----------- --- --- ---
EBITDA (NT$
Millions) 23,306 10,393 11,522
----------- ------ ------ ------
Number of
Wirebonders 25,216 16,015 16,118
------------ ------ ------ ------
Number of
Testers 4,726 3,801 3,796
--------- ----- ----- -----
EMS Operations
2Q/18 1Q/18 2Q/17
----- ----- -----
Net Revenues
(NT$ Millions) 30,476 28,691 28,248
------ ------ ------
Revenues by End Application
---------------------------
Communication 38% 42% 48%
------------- --- --- ---
Computer 19% 17% 17%
-------- --- --- ---
Consumer 25% 24% 20%
-------- --- --- ---
Industrial 11% 9% 8%
---------- --- --- ---
Automotive 6% 7% 6%
---------- --- --- ---
Others 1% 1% 1%
------ --- --- ---
Capacity
--------
CapEx (US$
Millions)* 19 7 4
----------- --- --- ---
* Capital expenditure excludes building construction costs.
ASE Technology Holding Co., Ltd.
Summary of Consolidated Statement of Comprehensive Income Data
(In NT$ millions, except per share data)
(Unaudited)
For the three months ended For the six months ended
========================== ========================
Jun. 30 Mar. 31 Jun. 30 Jun. 30 Jun. 30
2018 2018 2017 2018 2017
Net revenues:
Packaging 44,318 29,368 30,494 73,686 60,300
Testing 8,467 5,679 6,350 14,146 12,715
EMS 30,472 28,686 28,210 59,158 57,565
Others 1,244 1,233 972 2,477 1,997
Total net revenues 84,501 64,966 66,026 149,467 132,577
------ ------ ------ ------- -------
Cost of revenues (70,791) (54,578) (53,910) (125,369) (108,486)
Gross profit 13,710 10,388 12,116 24,098 24,091
------ ------ ------ ------ ------
Operating expenses:
Research and development (3,621) (2,775) (2,952) (6,396) (5,715)
Selling, general and administrative (4,702) (3,297) (3,945) (7,999) (7,932)
Total operating expenses (8,323) (6,072) (6,897) (14,395) (13,647)
Operating income 5,387 4,316 5,219 9,703 10,444
----- ----- ----- ----- ------
Net non-operating (expenses) income:
Interest expense - net (819) (357) (365) (1,176) (800)
Foreign exchange gain (loss) (1,469) 502 (201) (967) 2,690
Gain (loss) on valuation of financial assets and liabilities
2,341 (379) 800 1,962 (3,164)
Gain (loss) on equity-method investments (201) (444) 253 (645) 82
Others 7,681 138 5,684 7,819 5,983
Total non-operating income (expenses) 7,533 (540) 6,171 6,993 4,791
----- ---- ----- ----- -----
Income before tax 12,920 3,776 11,390 16,696 15,235
Income tax expense (1,268) (1,420) (3,207) (2,688) (4,093)
------ ------ ------ ------ ------
Income from continuing operations and 11,652 2,356 8,183 14,008 11,142
before noncontrolling interest
Noncontrolling interest (189) (260) (336) (449) (736)
---- ---- ---- ---- ----
Net income attributable to
shareholders of the parent 11,463 2,096 7,847 13,559 10,406
====== ===== ===== ====== ======
Per share data:
Earnings (losses) per share[3]
- Basic NT$2.70 NT$0.49 NT$1.93 NT$3.20 NT$2.63
- Diluted NT$2.69 NT$0.48 NT$1.78 NT$3.16 NT$2.44
Earnings (losses) per equivalent ADS[3]
- Basic US$0.183 US$0.034 US$0.128 US$0.217 US$0.171
- Diluted US$0.182 US$0.032 US$0.118 US$0.215 US$0.159
Number of weighted average shares used in 4,252,767 4,336,571 4,302,312 4,246,219 4,060,994
diluted EPS calculation (in thousands)
FX (NTD/USD) 29.57 29.33 30.18 29.45 30.69
[3] Earnings (losses) per share and earnings (losses) per equivalent ADS for the three months ended March 31, 2018 and 2017 and six months ended June 30, 2017 have been retrospective adjusted to reflect the impact from the joint share exchange.
ASE Technology Holding Co., Ltd.
Summary of Consolidated Statement of Comprehensive Income Data - ATM
(In NT$ millions, except per share data)
(Unaudited)
For the three months ended For the six months
ended
========================== ==================
Jun. 30 Mar. 31 Jun. 30 Jun. 30 Jun. 30
2018 2018 2017 2018 2017
Net revenues:
Packaging 44,973 30,313 31,718 75,286 62,779
Testing 8,467 5,679 6,350 14,146 12,715
Direct Material 1,059 1,050 960 2,109 1,895
Others 35 30 20 65 44
Total net revenues 54,534 37,072 39,048 91,606 77,433
------ ------ ------ ------ ------
Cost of revenues (43,689) (29,371) (30,021) (73,060) (59,573)
Gross profit 10,845 7,701 9,027 18,546 17,860
------ ----- ----- ------ ------
Operating expenses:
Research and development (2,670) (1,865) (2,113) (4,535) (4,113)
Selling, general and administrative (3,577) (2,418) (2,812) (5,995) (5,662)
Total operating expenses (6,247) (4,283) (4,925) (10,530) (9,775)
Operating income 4,598 3,418 4,102 8,016 8,085
----- ----- ----- ----- -----
Net non-operating (expenses) income:
Interest expense - net (865) (407) (443) (1,272) (941)
Foreign exchange gain (loss) (1,612) 685 (162) (927) 2,706
Gain (loss) on valuation of financial assets
and liabilities
2,337 (502) 522 1,835 (3,550)
Gain (loss) on equity-method investments 359 40 5,410 399 6,011
Others 7,713 167 33 7,880 358
Total non-operating income (expenses) 7,932 (17) 5,360 7,915 4,584
----- --- ----- ----- -----
Income before tax 12,530 3,401 9,462 15,931 12,669
Income tax expense (1,095) (1,250) (1,541) (2,345) (2,111)
------ ------ ------ ------ ------
Income from continuing operations and 11,435 2,151 7,921 13,586 10,558
before noncontrolling interest
Noncontrolling interest 28 (55) (74) (27) (152)
--- --- --- --- ----
Net income attributable to
shareholders of the parent
11,463 2,096 7,847 13,559 10,406
====== ===== ===== ====== ======
ASE Technology Holding Co., Ltd.
Summary of Consolidated Statement of Comprehensive Income Data - EMS
(In NT$ millions, except per share data)
(Unaudited)
For the three months ended For the six months
ended
========================== ==================
Jun. 30 Mar. 31 Jun. 30 Jun. 30 Jun. 30
2018 2018 2017 2018 2017
Net revenues:
Total net revenues 30,476 28,691 28,248 59,167 57,611
------ ------ ------ ------ ------
Cost of revenues (27,608) (25,991) (25,127) (53,599) (51,376)
Gross profit 2,868 2,700 3,121 5,568 6,235
----- ----- ----- ----- -----
Operating expenses:
Research and development (969) (926) (859) (1,895) (1,639)
Selling, general and administrative (1,088) (832) (1,126) (1,920) (2,227)
Total operating expenses (2,057) (1,758) (1,985) (3,815) (3,866)
Operating income 811 942 1,136 1,753 2,369
--- --- ----- ----- -----
Net non-operating (expenses) income:
Total non-operating income 255 63 366 318 583
--- --- --- --- ---
Income before tax 1,066 1,005 1,502 2,071 2,952
Income tax expense (158) (160) (284) (318) (587)
---- ---- ---- ---- ----
Income from continuing operations and 908 845 1,218 1,753 2,365
before noncontrolling interest
Noncontrolling interest (219) (207) (289) (426) (602)
---- ---- ---- ---- ----
Net income attributable to
shareholders of the parent
689 638 929 1,327 1,763
=== === === ===== =====
ASE Technology Holding Co., Ltd.
Summary of Consolidated Balance Sheet Data
(In NT$ millions)
(Unaudited)
As of Jun. 30, 2018 As of Mar. 31, 2018
=================== ===================
Current assets:
Cash and cash
equivalents 68,028 43,146
Financial assets
-current 16,966 10,551
Notes and
accounts
receivable 69,791 44,246
Inventories 41,395 34,190
Others 10,507 5,869
------ -----
Total current
assets 206,687 138,002
Financial assets
-non current &
Investments -
equity method 13,202 50,854
Property plant
and equipment 218,447 134,637
Intangible
assets 81,589 11,334
Prepaid lease
payments 10,832 8,943
Others 14,214 13,110
------ ------
Total assets 544,971 356,880
======= =======
Current
liabilities:
Short-term
borrowings 57,341 17,381
Current portion
of long-term
borrowings &
capital lease
obligations 24,924 5,739
Notes and
accounts
payable 47,587 33,112
Others 57,006 32,808
------ ------
Total current
liabilities 186,858 89,040
Bonds payable 16,984 16,983
Long-term
borrowings &
capital lease
obligations 117,388 34,435
Other
liabilities 11,786 10,395
------ ------
Total
liabilities 333,016 150,853
Shareholders of
the parent 195,770 193,244
Noncontrolling
interest 16,185 12,783
------ ------
Total
liabilities &
shareholders'
equity 544,971 356,880
======= =======
Current Ratio 1.11 1.55
Net Debt to
Equity 0.62 0.09
ASE Technology Holding Co., Ltd.
Summary of Consolidated Cash Flow Statements
(In NT$ millions)
(Unaudited)
For the three months ended For the six months
ended
========================== ==================
Jun. 30 Mar. 31 Jun. 30 Jun. 30 Jun. 30
2018 2018 2017 2018 2017
Cash Flows from Operating Activities:
Profit before income tax 12,920 3,776 11,390 16,696 15,235
Depreciation & amortization 10,768 7,232 7,184 18,000 14,447
Other operating activities items (17,469) (2,276) (10,905) (19,745) (5,924)
------- ------ ------- ------- ------
Net cash generated from operating activities 6,219 8,732 7,669 14,951 23,758
----- ----- ----- ------ ------
Cash Flows from Investing Activities:
Net payments for property, plant and equipment (11,641) (5,547) (6,843) (17,188) (13,725)
Other investment activities items (86,682) (3,993) 3,554 (90,675) 3,169
Net cash used in investing activities (98,323) (9,540) (3,289) (107,863) (10,556)
------- ------ ------ -------- -------
Cash Flows from Financing Activities:
Total net proceeds from (repayment of) debts 120,857 (504) (4,100) 120,353 (14,342)
Other financing activities items (5,483) (1,585) (144) (7,068) 10,729
Net cash generated from (used in) financing activities 115,374 (2,089) (4,244) 113,285 (3,613)
------- ------ ------ ------- ------
Foreign currency exchange effect 1,612 (35) 1,281 1,577 (4,091)
----- --- ----- ----- ------
Net increase (decrease) in cash and cash equivalents 24,882 (2,932) 1,417 21,950 5,498
------ ------ ----- ------ -----
Cash and cash equivalents at the beginning of period 43,146 46,078 42,474 46,078 38,393
------ ------ ------ ------ ------
Cash and cash equivalents at the end of period 68,028 43,146 43,891 68,028 43,891
------ ------ ------ ------ ------
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
View original content:http://www.prnewswire.com/news-releases/ase-technology-holding-co-ltd-reports-unaudited-consolidated-financial-results-for-the-second-quarter-of-2018-300687651.html
SOURCE ASE Technology Holding Co., Ltd.
