ASE Technology Holding Co., Ltd. Reports Unaudited Consolidated Financial Results for the Fourth Quarter and Full Year of 2018
TAIPEI, Taiwan, R.O.C., Jan. 30, 2019 /PRNewswire/ -- ASE Technology Holding Co., Ltd. (TAIEX: 3711, NYSE: ASX) ("We", "ASEH", or the "Company") was established following the completion of the merger between Advanced Semiconductor Engineering, Inc. ("ASE") and Siliconware Precision Industries Co., Ltd. on April 30, 2018. ASE is the Company's predecessor entity; therefore, the financial results of the Company for periods before merger are prepared under the assumption that the Company owned 100% shareholdings of ASE at the very beginning. The financial results after April 30, 2018, including both 4Q18 and 3Q18, reflect full quarters of combined operations following the completion of the merger. The financial results before April 30, 2018 reflect the operations of ASE and its subsidiaries prior to the establishment of the Company. As a result, the Company's financial results for 4Q18 and 3Q18 may not be comparable to that for 4Q17. In addition, the Company's financial results for the year ended December 31, 2018 may not be comparable to that for the year ended December 31, 2017. ASEH, the leading provider of semiconductor manufacturing services in assembly and test, today reported unaudited net revenues[1] of NT$114,028 million for 4Q18, up by 36% year-over-year and up by 6% sequentially. Net income attributable to shareholders of the parent for the quarter totaled NT$5,446 million, down from a net income attributable to shareholders of the parent of NT$6,246 million in 4Q17 and down from a net income attributable to shareholders of the parent of NT$6,257 million in 3Q18. Basic earnings per share for the quarter were NT$1.28 (or US$0.083 per ADS), compared to adjusted basic earnings per share of NT$1.48 for 4Q17 and basic earnings per share of NT$1.47 for 3Q18. Diluted earnings per share for the quarter were NT$1.24 (or US$0.081 per ADS), compared to adjusted diluted earnings per share of NT$1.42 for 4Q17 and diluted earnings per share of NT$1.43 for 3Q18.
For the full year of 2018, the Company reported net revenues of NT$371,092 million and net income attributable to shareholders of the parent of NT$25,262 million. Basic earnings per share for the full year of 2018 were NT$5.95 (or US$0.396 per ADS). Diluted earnings per share for the full year of 2018 were NT$5.84 (or US$0.389 per ADS).
RESULTS OF OPERATIONS
4Q18 Results Highlights -- Consolidated
-- Net revenue contribution from packaging operations, testing operations,
EMS operations and others, each represented approximately 45%, 10%, 44%
and 1%, respectively, of total net revenues for the quarter.
-- Cost of revenue was NT$95,344 million for the quarter, up from NT$89,216
million in 3Q18.
-- Raw material cost totaled NT$59,072 million for the quarter,
representing 52% of total net revenues.
-- Labor cost totaled NT$12,840 million for the quarter, representing
11% of total net revenues.
-- Depreciation, amortization and rental expenses totaled NT$11,577
million for the quarter.
-- Gross margin decreased 0.7 percentage points to 16.4% in 4Q18 from 17.1%
in 3Q18.
-- Operating margin was 7.5% in 4Q18 compared to 7.8% in 3Q18.
-- In terms of non-operating items:
-- Net interest expense was NT$923 million.
-- Net foreign exchange loss of NT$311 million was primarily
attributable to the appreciation of U.S. dollar against NT dollar.
-- Gain on valuation of financial assets and liabilities was NT$140
million.
-- Net gain on equity-method investments was NT$6 million.
-- Other net non-operating expenses of NT$250 million were primarily
attributable to miscellaneous expenses. Total non-operating expenses
for the quarter were NT$1,338 million.
-- Income before tax was NT$7,235 million for 4Q18, compared to NT$8,117
million in 3Q18. We recorded income tax expenses of NT$1,342 million for
the quarter, compared to NT$1,554 million in 3Q18.
-- In 4Q18, net income attributable to shareholders of the parent was
NT$5,446 million, compared to net income attributable to shareholders of
the parent of NT$6,246 million in 4Q17 and net income attributable to
shareholders of the parent of NT$6,257 million in 3Q18.
-- Our total number of shares outstanding at the end of the quarter was
4,321,629,382, including treasury stock owned by our subsidiaries. Our
4Q18 basic earnings per share of NT$1.28 (or US$0.083 per ADS) were
based on 4,248,272,624 weighted average numbers of shares outstanding in
4Q18. Our 4Q18 diluted earnings per share of NT$1.24 (or US$0.081 per
ADS) were based on 4,254,977,677 weighted average number of shares
outstanding in 4Q18.
4Q18 Results Highlights -- ATM[2]
-- Cost of revenues was NT$50,158 million for the quarter, down by 4%
sequentially.
-- Raw material cost totaled NT$17,106 million for the quarter,
representing 27% of total net revenues.
-- Labor cost totaled NT$11,321 million for the quarter, representing
18% of total net revenues.
-- Depreciation, amortization and rental expenses totaled NT$10,998
million for the quarter.
-- Gross margin increased 0.3 percentage points to 21.8% in 4Q18 from 21.5%
in 3Q18.
-- Operating margin was 9.8% in 4Q18 compared to 10.1% in 3Q18.
4Q18 Results Highlights -- EMS
-- Cost of revenues for the quarter was NT$46,135 million, up by 22%
sequentially.
-- Raw material cost totaled NT$42,103 million for the quarter,
representing 83% of total net revenues.
-- Labor cost totaled NT$1,500 million for the quarter, representing 3%
of total net revenues.
-- Depreciation, amortization and rental expenses totaled NT$469
million for the quarter.
-- Gross margin decreased to 9.1% in 4Q18 from 9.9% in 3Q18.
-- Operating margin increased to 4.3% in 4Q18 from 4.1% in 3Q18.
2018 Full-Year Results Highlights -- Consolidated
-- Net revenues for the full year of 2018 amounted to NT$371,092 million,
up by 28% from 2017. The revenue contribution from packaging operations,
testing operations, EMS operations and others, each represented
approximately 48%, 10%, 41% and 1%, respectively, of total net revenues
for the year.
-- Cost of revenue for the year of 2018 was NT$309,929 million, compared
with NT$237,709 million in 2017.
-- Raw material cost totaled NT$182,062 million for the year,
representing 49% of total net revenues.
-- Labor cost totaled NT$46,657 million for the year, representing 13%
of total net revenues.
-- Depreciation, amortization and rental expenses totaled NT$40,472
million for the year.
-- Gross margin decreased 1.7 percentage points to 16.5% in 2018 from 18.2%
in 2017.
-- Operating margin decreased to 7.2% in 2018 from 8.7% in 2017.
-- Total non-operating income for the year was NT$5,400 million, compared
to total non-operating income of NT$5,711 million for 2017.
-- Income before tax was NT$32,048 million for 2018. We recognized an
income tax expense of NT$5,584 million for the year.
-- In 2018, net income attributable to shareholders of the parent amounted
to NT$25,262 million, compared with a net income attributable to
shareholders of the parent of NT$22,988 million in 2017.
-- Our total number of shares outstanding at the end of the year was
4,321,629,382, including treasury stock owned by our subsidiaries. Our
2018 basic earnings per share of NT$5.95 (or US$0.396 per ADS) were
based on 4,245,246,569 weighted average numbers of shares outstanding in
2018. Our 2018 diluted earnings per share of NT$5.84 (or US$0.389 per
ADS) were based on 4,251,128,654 weighted average number of shares
outstanding in 2018.
2018 Full-Year Results Highlights -- ATM
-- Cost of revenues for the full year of 2018 was NT$175,274 million,
compared with NT$121,873 million in 2017.
-- Raw material cost totaled NT$59,181 million for the year,
representing 27% of total net revenues.
-- Labor cost totaled NT$41,030 million for the year, representing 19%
of total net revenues.
-- Depreciation, amortization and rental expenses totaled NT$38,192
million for the year.
-- Gross margin decreased to 21.1% in 2018 from 24.3% in 2017.
-- Operating margin decreased to 9.5% in 2018 from 12.3% in 2017.
2018 Full-Year Results Highlights -- EMS
-- Cost of revenues was NT$137,580 million, up by 14% from 2017.
-- Raw material cost totaled NT$123,201 million for the year,
representing 81% of total net revenues.
-- Labor cost totaled NT$5,543 million for the year, representing 4% of
total net revenues.
-- Depreciation, amortization and rental expenses totaled NT$1,827
million for the year.
-- Gross margin decreased to 9.4% in 2018 from 10.2% in 2017.
-- Operating margin decreased to 3.7% in 2018 from 4.2% in 2017.
LIQUIDITY AND CAPITAL RESOURCES
-- Capital expenditures in 4Q18 totaled US$248 million, of which US$134
million were used in packaging operations, US$95 million in testing
operations, US$11 million in EMS operations and US$8 million in
interconnect materials operations and others.
-- For the full year of 2018, we spent US$1,083 million for capital
expenditures, including US$602 million in packaging operations, US$403
million in testing operations, US$58 million in EMS operations and US$20
million in interconnect materials operations and others.
-- As of December 31, 2018, total unused credit lines amounted to
NT$219,912 million.
-- Current ratio was 1.29 and net debt to equity ratio was 0.60 as of
December 31, 2018.
-- Total number of employees was 93,884 as of December 31, 2018, compared
to 93,486 as of September 30, 2018.
BUSINESS REVIEW
Customers
ATM CONSOLIDATED BASIS
-- Our five largest customers together accounted for approximately 41% of
our total net revenues both in 4Q18 and in 3Q18. One customer accounted
for more than 10% of our total net revenues in 4Q18.
-- Our top 10 customers contributed 56% of our total net revenues for the
quarter, compared to 55% in 3Q18.
-- Our customers that are integrated device manufacturers or IDMs accounted
for 35% of our total net revenues both in 4Q18 and in 3Q18.
EMS BASIS
-- Our five largest customers together accounted for approximately 82% of
our total net revenues in 4Q18, compared to 80% in 3Q18. One customer
accounted for more than 10% of our total net revenues in 4Q18.
-- Our top 10 customers contributed 91% of our total net revenues during
the quarter in 4Q18, compared to 90% in 3Q18.
[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.
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
4Q/18
3Q/18
4Q/17
EBITDA (NT$ Millions) 21,082 21,579 16,147
---
ATM Consolidated Operations
4Q/18
3Q/18
4Q/17
Net Revenues (NT$ Millions) 64,120 66,324 41,794
---
Revenues by Application
---
Communication 56% 54% 48%
---
Computer 13% 14% 11%
---
Automotive, Consumer & Others 31% 32% 41%
---
Revenues by Type
---
Bumping, Flip Chip, WLP & SiP 33% 31% 28%
---
Wirebonding 39% 43% 45%
---
Discrete and Others 9% 8% 9%
---
Testing 17% 16% 16%
---
Material 2% 2% 2%
---
Capacity & EBITDA
---
CapEx (US$ Millions)* 237 269 133
---
EBITDA (NT$ Millions) 18,271 19,092 13,508
---
Number of Wirebonders 25,172 25,219 16,076
---
Number of Testers 4,822 4,802 3,760
---
EMS Operations
4Q/18
3Q/18
4Q/17
Net Revenues (NT$ Millions) 50,745 42,009 43,289
---
Revenues by End Application
---
Communication 32% 34% 42%
---
Computer & Storage 10% 14% 14%
---
Consumer 44% 36% 32%
---
Industrial 10% 10% 6%
---
Automotive 4% 5% 5%
---
Others 0% 1% 1%
---
Capacity
---
CapEx (US$ Millions)* 11 21 7
---
*
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 year ended
===
Dec. 31
Sep. 30
Dec. 31
Dec. 31
Dec. 31
2018 2018 2017 2018 2017
Net revenues:
Packaging 51,149 53,473 33,045 178,308 126,225
Testing 10,919 10,838 6,553 35,903 26,157
EMS 50,736 41,996 43,285 151,890 133,948
Others 1,224 1,290 1,103 4,991 4,111
Total net revenues 114,028 107,597 83,986 371,092 290,441
Cost of revenues (95,344) (89,216) (69,193) (309,929) (237,709)
Gross profit 18,684 18,381 14,793 61,163 52,732
Operating expenses:
Research and development (4,293) (4,274) (3,046) (14,963) (11,747)
Selling, general and administrative (5,818) (5,735) (4,041) (19,552) (15,767)
Total operating expenses (10,111) (10,009) (7,087) (34,515) (27,514)
Operating income 8,573 8,372 7,706 26,648 25,218
Net non-operating (expenses) income:
Interest expense - net (923) (971) (318) (3,070) (1,468)
Foreign exchange gain (loss) (311) 262 780 (1,016) 3,503
Gain (loss) on valuation of financial assets and
liabilities
140 (112) (216) 1,990 (2,782)
Gain (loss) on equity-method investments 6 118 29 (521) 434
Others (250) 448 (102) 8,017 6,024
Total non-operating income (expenses) (1,338) (255) 173 5,400 5,711
Income before tax 7,235 8,117 7,879 32,048 30,929
Income tax expense (1,342) (1,554) (1,085) (5,584) (6,261)
Income from continuing operations and 5,893 6,563 6,794 26,464 24,668
before noncontrolling interest
Noncontrolling interest (447) (306) (548) (1,202) (1,680)
Net income attributable to
shareholders of the parent
5,446 6,257 6,246 25,262 22,988
===
Per share data[3]:
Earnings (losses) per share
-- Basic
NT$1.28
NT$1.47
NT$1.48
NT$5.95
NT$5.63
-- Diluted
NT$1.24
NT$1.43
NT$1.42
NT$5.84
NT$5.23
Earnings (losses) per equivalent ADS
-- Basic
US$0.083
US$0.096
US$0.098
US$0.396
US$0.370
-- Diluted
US$0.081
US$0.094
US$0.095
US$0.389
US$0.344
Number of weighted average shares used in 4,254,978 4,255,741 4,316,234 4,251,129 4,184,620
diluted EPS calculation (in thousands)
FX (NTD/USD) 30.79 30.61 30.08 30.07 30.42
[3] Per share data for the three months and year ended December 31, 2017 has been retrospective adjusted to reflect the impact from the joint share exchange agreement.
ASE Technology Holding Co., Ltd.
Summary of Consolidated Statement of Comprehensive Income Data -- ATM
(In NT$ millions, except per share data)
(Unaudited)
For the three months ended For the year ended
===
Dec. 31
Sep. 30
Dec. 31
Dec. 31
Dec. 31
2018 2018 2017 2018 2017
Net revenues:
Packaging 52,068 54,321 34,226 181,675 130,902
Testing 10,920 10,839 6,556 35,905 26,160
Direct Material 1,093 1,134 989 4,336 3,932
Others 39 30 23 134 87
Total net revenues 64,120 66,324 41,794 222,050 161,081
Cost of revenues (50,158) (52,056) (30,932) (175,274) (121,873)
Gross profit 13,962 14,268 10,862 46,776 39,208
Operating expenses:
Research and development (3,349) (3,257) (2,125) (11,141) (8,361)
Selling, general and administrative (4,306) (4,298) (2,736) (14,599) (11,037)
Total operating expenses (7,655) (7,555) (4,861) (25,740) (19,398)
Operating income 6,307 6,713 6,001 21,036 19,810
Net non-operating (expenses) income:
Interest expense - net (949) (1,032) (394) (3,253) (1,751)
Foreign exchange gain (loss) (350) 128 822 (1,149) 3,657
Gain (loss) on valuation of financial assets
and liabilities
323 (13) (577) 2,145 (3,762)
Gain (loss) on equity-method investments 1,311 1,230 1,245 2,940 8,505
Others (239) 329 2 7,970 514
Total non-operating income (expenses) 96 642 1,098 8,653 7,163
Income before tax 6,403 7,355 7,099 29,689 26,973
Income tax expense (938) (1,181) (776) (4,464) (3,671)
Income from continuing operations and 5,465 6,174 6,323 25,225 23,302
before noncontrolling interest
Noncontrolling interest (19) 83 (77) 37 (314)
Net income attributable to
shareholders of the parent
5,446 6,257 6,246 25,262 22,988
===
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 year ended
===
Dec. 31
Sep. 30
Dec. 31
Dec. 31
Dec. 31
2018 2018 2017 2018 2017
Net revenues:
Total net revenues 50,745 42,009 43,289 151,921 134,000
Cost of revenues (46,135) (37,846) (39,287) (137,580) (120,354)
Gross profit 4,610 4,163 4,002 14,341 13,646
Operating expenses:
Research and development (967) (1,041) (936) (3,903) (3,452)
Selling, general and administrative (1,463) (1,388) (1,208) (4,771) (4,536)
Total operating expenses (2,430) (2,429) (2,144) (8,674) (7,988)
Operating income 2,180 1,734 1,858 5,667 5,658
Net non-operating (expenses) income:
Total non-operating income (36) 298 454 580 1,272
Income before tax 2,144 2,032 2,312 6,247 6,930
Income tax expense (387) (356) (324) (1,061) (1,204)
Income from continuing operations and 1,757 1,676 1,988 5,186 5,726
before noncontrolling interest
Noncontrolling interest (429) (397) (500) (1,252) (1,440)
Net income attributable to
shareholders of the parent
1,328 1,279 1,488 3,934 4,286
===
ASE Technology Holding Co., Ltd.
Summary of Consolidated Balance Sheet Data
(In NT$ millions)
(Unaudited)
As of Dec. 31,
2018 As of Sep. 30, 2018
===
Current assets:
Cash and cash equivalents 51,518 55,335
Financial assets --current 13,802 8,278
Notes and accounts
receivable 79,481 79,809
Inventories 46,688 47,153
Others 10,070 10,625
Total current assets 201,559 201,200
Financial assets --non
current & Investments --
equity
method 12,555 13,698
Property plant and equipment 214,593 216,200
Intangible assets 80,216 80,857
Prepaid lease payments 10,765 10,500
Others 13,683 13,516
Total assets 533,371 535,971
Current liabilities:
Short-term borrowings 43,264 63,365
Current portion of long-
term borrowings &
capital lease obligations
10,796 24,420
Notes and accounts payable 56,884 60,470
Others 45,355 44,493
Total current liabilities 156,299 192,748
Bonds payable 16,986 16,985
Long-term borrowings &
capital lease obligations 127,351 103,386
Other liabilities 12,065 11,719
Total liabilities 312,701 324,838
Shareholders of the parent 203,023 197,330
Noncontrolling interest 17,647 13,803
Total liabilities &
shareholders' equity 533,371 535,971
Current Ratio 1.29 1.04
Net Debt to Equity 0.60 0.68
ASE Technology Holding Co., Ltd.
Summary of Consolidated Cash Flow Statements
(In NT$ millions)
(Unaudited)
For the three months ended For the year ended
Dec. 31
Sep. 30 Dec.31 Dec. 31
Dec. 31
2018 2018 2017 2018 2017
Cash Flows from Operating Activities:
Profit before income tax 7,235 8,117 7,879 32,048 30,929
Depreciation & amortization 12,220 12,469 7,421 42,689 29,205
Other operating activities items (920) (3,312) (1,138) (23,977) (12,703)
Net cash generated from operating activities 18,535 17,274 14,162 50,760 47,431
Cash Flows from Investing Activities:
Net payments for property, plant (9,993) (13,078) (4,784) (40,259) (23,211)
and equipment
Other investment activities items (6,230) 7,622 3,178 (89,283) 7,125
Net cash used in investing activities (16,223) (5,456) (1,606) (129,542) (16,086)
Cash Flows from Financing Activities:
Total net proceeds from (repayment of) (10,208) (8,177) (4,899) 101,968 (19,636)
debts
Dividends paid 0 (10,614) 0 (10,614) (11,214)
Other financing activities items 3,255 (4,115) 323 (7,928) 11,526
Net cash generated from (used in) (6,953) (22,906) (4,576) 83,426 (19,324)
financing activities
Foreign currency exchange effect 824 (1,605) (877) 796 (4,336)
Net increase (decrease) in cash (3,817) (12,693) 7,103 5,440 7,685
and cash equivalents
Cash and cash equivalents at the 55,335 68,028 38,975 46,078 38,393
beginning of period
Cash and cash equivalents at the 51,518 55,335 46,078 51,518 46,078
end of period
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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