ASE Technology Holding Co., Ltd. Reports Unaudited Consolidated Financial Results for the Third Quarter of 2018
TAIPEI, Taiwan, Oct. 30, 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. on April 30, 2018. The financial results for 3Q18 reflect a full quarter of combined operations following the completion of the merger. The financial results for 2Q18 reflect operations of ASE starting from April 1, 2018 and operations of ASEH starting from April 30, 2018. The financial results for 2Q17 reflect the operations of ASE and its subsidiaries prior to the establishment of the Company. As a result, the Company's financial results for 3Q18 may not be comparable to those of 2Q18 and 3Q17. ASEH, the leading provider of semiconductor manufacturing services in assembly and test, today reported unaudited net revenues([1]) of NT$107,597 million for 3Q18, up by 46% year-over-year and up by 27% sequentially. Net income attributable to shareholders of the parent for the quarter totaled NT$6,257 million, down from a net income attributable to shareholders of the parent of NT$6,336 million in 3Q17 and down from a net income attributable to shareholders of the parent of NT$11,463 million in 2Q18. Basic earnings per share for the quarter were NT$1.47 (or US$0.096 per ADS), compared to adjusted basic earnings per share of NT$1.52 for 3Q17 and basic earnings per share of NT$2.70 for 2Q18. Diluted earnings per share for the quarter were NT$1.43 (or US$0.094 per ADS), compared to adjusted diluted earnings per share of NT$1.39 for 3Q17 and diluted earnings per share of NT$2.69 for 2Q18.
RESULTS OF OPERATIONS
3Q18 Results Highlights - Consolidated
-- Net revenue contribution from packaging operations, testing operations,
EMS operations and others, each represented approximately 50%, 10%, 39%
and 1%, respectively, of total net revenues for the quarter.
-- Cost of revenue was NT$89,216 million for the quarter, up from NT$70,791
million in 2Q18.
-- Raw material cost totaled NT$52,487 million for the quarter,
representing 49% of total net revenues.
-- Labor cost totaled NT$13,115 million for the quarter, representing
12% of total net revenues.
-- Depreciation, amortization and rental expenses totaled NT$11,839
million for the quarter.
-- Gross margin increased 0.9 percentage points to 17.1% in 3Q18 from 16.2%
in 2Q18.
-- Operating margin was 7.8% in 3Q18 compared to 6.4% in 2Q18.
-- In terms of non-operating items:
-- Net interest expense was NT$971 million.
-- Net foreign exchange gain of NT$262 million was primarily
attributable to the appreciation of U.S. dollar against NT dollar.
-- Loss on valuation of financial assets and liabilities was NT$112
million.
-- Net gain on equity-method investments was NT$118 million.
-- Other net non-operating income of NT$448 million were primarily
attributable to miscellaneous income. Total non-operating expenses
for the quarter was NT$255 million.
-- Income before tax was NT$8,117 million for 3Q18, compared to NT$12,920
million in 2Q18. We recorded income tax expenses of NT$1,554 million for
the quarter, compared to NT$1,268 million in 2Q18.
-- In 3Q18, net income attributable to shareholders of the parent was
NT$6,257 million, compared to net income attributable to shareholders of
the parent of NT$6,336 million in 3Q17 and net income attributable to
shareholders of the parent of NT$11,463 million in 2Q18.
-- Our total number of shares outstanding at the end of the quarter was
4,320,148,632, including treasury stock owned by our subsidiaries. Our
3Q18 basic earnings per share of NT$1.47 (or US$0.096 per ADS) were
based on 4,246,971,593 weighted average numbers of shares outstanding in
3Q18. Our 3Q18 diluted earnings per share of NT$1.43 (or US$0.094 per
ADS) were based on 4,255,740,934 weighted average number of shares
outstanding in 3Q18.
3Q18 Results Highlights - ATM([2])
-- Cost of revenues was NT$52,056 million for the quarter, up by 19%
sequentially.
-- Raw material cost totaled NT$18,476 million for the quarter,
representing 28% of total net revenues.
-- Labor cost totaled NT$11,704 million for the quarter, representing
18% of total net revenues.
-- Depreciation, amortization and rental expenses totaled NT$11,277
million for the quarter.
-- Gross margin increased 1.6 percentage points to 21.5% in 3Q18 from 19.9%
in 2Q18.
-- Operating margin was 10.1% in 3Q18 compared to 8.4% in 2Q18.
3Q18 Results Highlights - EMS
-- Cost of revenues for the quarter was NT$37,846 million, up by 37%
sequentially.
-- Raw material cost totaled NT$34,096 million for the quarter,
representing 81% of total net revenues.
-- Labor cost totaled NT$1,390 million for the quarter, representing 3%
of total net revenues.
-- Depreciation, amortization and rental expenses totaled NT$452
million for the quarter.
-- Gross margin increased to 9.9% in 3Q18 from 9.4% in 2Q18.
-- Operating margin increased to 4.1% in 3Q18 from 2.7% in 2Q18.
LIQUIDITY AND CAPITAL RESOURCES
-- Capital expenditures in 3Q18 totaled US$290 million, of which US$128
million were used in packaging operations, US$139 million in testing
operations, US$21 million in EMS operations and US$2 million in
interconnect materials operations.
-- As of September 30, 2018, total unused credit lines amounted to
NT$165,108 million.
-- Current ratio was 1.04 and net debt to equity ratio was 0.68 as of
September 30, 2018.
-- Total number of employees was 93,486 as of September 30, 2018, compared
to 93,680 as of June 30, 2018.
Business Review
Customers
ATM consolidated Basis
-- Our five largest customers together accounted for approximately 41% of
our total net revenues in 3Q18, compared to 39% in 2Q18. One customer
accounted for more than 10% of our total net revenues in 3Q18.
-- Our top 10 customers contributed 55% of our total net revenues for the
quarter, compared to 52% in 2Q18.
-- Our customers that are integrated device manufacturers or IDMs accounted
for 35% of our total net revenues for the quarter, compared to 37% in
2Q18.
EMS Basis
-- Our five largest customers together accounted for approximately 80% of
our total net revenues in 3Q18, compared to 75% in 2Q18. One customer
accounted for more than 10% of our total net revenues in 3Q18.
-- Our top 10 customers contributed 90% of our total net revenues during
the quarter in 3Q18, compared to 87% in 2Q18.
About ASE Technology Holding Co., Ltd.
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
3Q/18
2Q/18
3Q/17
EBITDA (NT$ Millions) 21,579 24,893 15,244
---
ATM Consolidated Operations
3Q/18
2Q/18
3Q/17
Net Revenues (NT$ Millions) 66,324 54,534 41,854
---
Revenues by Application
---
Communication 54% 52% 49%
---
Computer 14% 14% 10%
---
Automotive, Consumer & Others 32% 34% 41%
---
Revenues by Type
---
Bumping, Flip Chip, WLP & SiP 31% 29% 26%
---
Wirebonding 43% 46% 46%
---
Discrete and Others 8% 7% 9%
---
Testing 16% 16% 16%
---
Material 2% 2% 3%
---
Capacity & EBITDA
---
CapEx (US$ Millions)* 269 317 117
---
EBITDA (NT$ Millions) 19,092 23,306 13,175
---
Number of Wirebonders 25,219 25,216 16,083
---
Number of Testers 4,802 4,726 3,739
---
EMS Operations
3Q/18
2Q/18
3Q/17
---
Net
Revenues
(NT$
Millions) 42,009 30,476 33,100
Revenues by End Application
---
Communication 34% 38% 45%
---
Computer
&
Storage 14% 19% 14%
---
Consumer 36% 25% 26%
---
Industrial 10% 11% 8%
---
Automotive 5% 6% 6%
---
Others 1% 1% 1%
---
Capacity
---
CapEx
(US$
Millions)* 21 19 13
---
* 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 nine months ended
===
Sep. 30
Jun. 30
Sep. 30
Sep. 30
Sep. 30
2018 2018 2017 2018 2017
Net revenues:
Packaging 53,473 44,318 32,880 127,159 93,180
Testing 10,838 8,467 6,889 24,984 19,604
EMS 41,996 30,472 33,098 101,154 90,663
Others 1,290 1,244 1,011 3,767 3,008
Total net revenues 107,597 84,501 73,878 257,064 206,455
Cost of revenues (89,216) (70,791) (60,030) (214,585) (168,516)
Gross profit 18,381 13,710 13,848 42,479 37,939
Operating expenses:
Research and
development (4,274) (3,621) (2,986) (10,670) (8,701)
Selling, general and
administrative (5,735) (4,702) (3,794) (13,734) (11,726)
Total operating
expenses (10,009) (8,323) (6,780) (24,404) (20,427)
Operating income 8,372 5,387 7,068 18,075 17,512
Net non-operating (expenses) income:
Interest expense -
net (971) (819) (350) (2,147) (1,150)
Foreign exchange gain
(loss) 262 (1,469) 33 (705) 2,723
Gain (loss) on
valuation of
financial assets and
liabilities (112) 2,341 598 1,850 (2,566)
Gain (loss) on
equity-method
investments 118 (201) 323 (527) 405
Others 448 7,681 143 8,267 6,126
Total non-operating
income (expenses) (255) 7,533 747 6,738 5,538
Income before tax 8,117 12,920 7,815 24,813 23,050
Income tax expense (1,554) (1,268) (1,083) (4,242) (5,176)
Income from
continuing
operations and 6,563 11,652 6,732 20,571 17,874
before noncontrolling interest
Noncontrolling
interest (306) (189) (396) (755) (1,132)
Net income attributable to
shareholders of the parent
6,257 11,463 6,336 19,816 16,742
Per share data[3]:
Earnings (losses) per share
- Basic
NT$1.47
NT$2.70
NT$1.52
NT$4.67
NT$4.16
- Diluted
NT$1.43
NT$2.69
NT$1.39
NT$4.60
NT$3.79
Earnings (losses) per equivalent ADS
- Basic
US$0.096
US$0.183
US$0.100
US$0.313
US$0.272
- Diluted
US$0.094
US$0.182
US$0.092
US$0.308
US$0.248
Number of weighted
average shares used
in 4,255,741 4,252,767 4,312,402 4,249,525 4,133,048
diluted EPS calculation (in
thousands)
FX (NTD/USD) 30.61 29.57 30.22 29.83 30.54
ASE Technology Holding Co., Ltd.
Summary of Consolidated Statement of Comprehensive Income Data - ATM
(In NT$ millions, except per share data)
(Unaudited)
For the three months ended For the nine months ended
===
Sep. 30
Jun. 30
Sep. 30
Sep. 30
Sep. 30
2018 2018 2017 2018 2017
Net revenues:
Packaging 54,321 44,973 33,897 129,607 96,676
Testing 10,839 8,467 6,889 24,985 19,604
Direct Material 1,134 1,059 1,048 3,243 2,943
Others 30 35 20 95 64
Total net revenues 66,324 54,534 41,854 157,930 119,287
Cost of revenues (52,056) (43,689) (31,368) (125,116) (90,941)
Gross profit 14,268 10,845 10,486 32,814 28,346
Operating expenses:
Research and
development (3,257) (2,670) (2,123) (7,792) (6,236)
Selling, general and
administrative (4,298) (3,577) (2,639) (10,293) (8,301)
Total operating
expenses (7,555) (6,247) (4,762) (18,085) (14,537)
Operating income 6,713 4,598 5,724 14,729 13,809
Net non-operating (expenses) income:
Interest expense -
net (1,032) (865) (416) (2,304) (1,357)
Foreign exchange gain
(loss) 128 (1,612) 129 (799) 2,835
Gain (loss) on
valuation of
financial assets and
liabilities (13) 2,337 365 1,822 (3,185)
Gain (loss) on
equity-method
investments 1,230 359 1,249 1,629 7,260
Others 329 7,713 154 8,209 512
Total non-operating
income (expenses) 642 7,932 1,481 8,557 6,065
Income before tax 7,355 12,530 7,205 23,286 19,874
Income tax expense (1,181) (1,095) (784) (3,526) (2,895)
Income from
continuing
operations and 6,174 11,435 6,421 19,760 16,979
before noncontrolling interest
Noncontrolling
interest 83 28 (85) 56 (237)
Net income attributable to
shareholders of the parent
6,257 11,463 6,336 19,816 16,742
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 nine months
ended
===
Sep. 30
Jun. 30
Sep. 30
Sep. 30
Sep. 30
2018 2018 2017 2018 2017
Net revenues:
Total net revenues 42,009 30,476 33,100 101,176 90,711
Cost of revenues (37,846) (27,608) (29,691) (91,445) (81,067)
Gross profit 4,163 2,868 3,409 9,731 9,644
Operating expenses:
Research and
development (1,041) (969) (877) (2,936) (2,516)
Selling, general and
administrative (1,388) (1,088) (1,101) (3,308) (3,328)
Total operating
expenses (2,429) (2,057) (1,978) (6,244) (5,844)
Operating income 1,734 811 1,431 3,487 3,800
Net non-operating (expenses) income:
Total non-operating
income 298 255 235 616 818
Income before tax 2,032 1,066 1,666 4,103 4,618
Income tax expense (356) (158) (293) (674) (880)
Income from
continuing
operations and 1,676 908 1,373 3,429 3,738
before noncontrolling interest
Noncontrolling
interest (397) (219) (338) (823) (940)
Net income attributable to
shareholders of the parent
1,279 689 1,035 2,606 2,798
ASE Technology Holding Co., Ltd.
Summary of Consolidated Balance Sheet Data
(In NT$ millions)
(Unaudited)
As of Sep. 30,
2018 As of Jun. 30, 2018
===
Current assets:
Cash and cash equivalents 55,335 68,028
Financial assets - current 8,278 16,966
Notes and accounts
receivable 79,809 69,791
Inventories 47,153 41,395
Others 10,625 10,507
Total current assets 201,200 206,687
Financial assets - non
current & Investments -
equity
method 13,698 13,202
Property plant and
equipment 216,200 218,447
Intangible assets 80,857 81,589
Prepaid lease payments 10,500 10,832
Others 13,516 14,214
Total assets 535,971 544,971
Current liabilities:
Short-term borrowings 63,365 57,341
Current portion of long-
term borrowings &
capital lease obligations
24,420 24,924
Notes and accounts payable 60,470 47,587
Others 44,493 57,006
Total current liabilities 192,748 186,858
Bonds payable 16,985 16,984
Long-term borrowings &
capital lease obligations 103,386 117,388
Other liabilities 11,719 11,786
Total liabilities 324,838 333,016
Shareholders of the parent 197,330 195,770
Noncontrolling interest 13,803 16,185
Total liabilities &
shareholders' equity 535,971 544,971
Current Ratio 1.04 1.11
Net Debt to Equity 0.68 0.62
ASE Technology Holding Co., Ltd.
Summary of Consolidated Cash Flow Statements
(In NT$ millions)
(Unaudited)
For the three months ended For the nine
months ended
Sep. 30
Jun. 30 Sep. 30 Sep. 30
Sep. 30
2018 2018 2017 2018 2017
Cash Flows from Operating
Activities:
Profit before income tax 8,117 12,920 7,814 24,813 23,050
Depreciation & amortization 12,469 10,768 7,338 30,469 21,784
Other operating activities
items (3,312) (17,469) (5,641) (23,057) (11,565)
Net cash generated from
operating activities 17,274 6,219 9,511 32,225 33,269
Cash Flows from Investing
Activities:
Net payments for property,
plant (13,078) (11,641) (4,702) (30,266) (18,427)
and equipment
Other investment activities
items 7,622 (86,682) 778 (83,053) 3,947
Net cash used in investing
activities (5,456) (98,323) (3,924) (113,319) (14,480)
Cash Flows from Financing
Activities:
Total net proceeds from
(repayment of) debts (8,177) 120,857 (395) 112,176 (14,737)
Dividends paid (10,614) 0 (11,214) (10,614) (11,214)
Other financing activities
items (4,115) (5,483) 474 (11,183) 11,203
Net cash generated from (used
in) financing activities (22,906) 115,374 (11,135) 90,379 (14,748)
Foreign currency exchange
effect (1,605) 1,612 632 (28) (3,459)
Net increase (decrease) in cash (12,693) 24,882 (4,916) 9,257 582
and cash equivalents
Cash and cash equivalents at
the beginning of period 68,028 43,146 43,891 46,078 38,393
Cash and cash equivalents at
the 55,335 68,028 38,975 55,335 38,975
end of period
[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]Per share data for the three
months and nine months ended
September 30, 2017 has been
retrospective adjusted to reflect
the impact from the joint share
exchange agreement.
IR Contact:
Iris Wu, Manager
US contact:
Grace Teng, Manager
iris.wu@asetechholding.com
Echo Lin, Senior Associate
grace_teng@aseglobal.com
Tel: +886.2.6636.5678
echo.lin@asetechholding.com
Tel: +886.2.6636.5678
http://www.aseglobal.com
+1.510.687.2491
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SOURCE ASE Technology Holding Co., Ltd.
