ASE Technology Holding Co., Ltd. Reports Unaudited Consolidated Financial Results for the Second Quarter of 2019
TAIPEI, Taiwan, R.O.C., July 31, 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. The financial results after April 30, 2018, including both 2Q19 and 1Q19, reflect full quarters 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. As a result, the Company's financial results for 2Q19 and 1Q19 may not be comparable to that of 2Q18. ASEH, the leading provider of semiconductor manufacturing services in assembly and test, today reported unaudited net revenues[1] of NT$90,741 million for 2Q19, up by 7% year-over-year and up by 2% sequentially. Net income attributable to shareholders of the parent for the quarter totaled NT$2,690 million, down from a net income attributable to shareholders of the parent of NT$11,463 million in 2Q18 and up from a net income attributable to shareholders of the parent of NT$2,043 million in 1Q19. Basic earnings per share for the quarter were NT$0.63 (or US$0.041 per ADS), compared to basic earnings per share of NT$2.70 for 2Q18 and NT$0.48 for 1Q19. Diluted earnings per share for the quarter were NT$0.62 (or US$0.040 per ADS), compared to diluted earnings per share of NT$2.69 for 2Q18 and NT$0.46 for 1Q19.
RESULTS OF OPERATIONS
2Q19 Results Highlights - Consolidated
-- Net revenue contribution from packaging operations, testing operations,
EMS operations and others, each represented approximately 52%, 11%, 35%
and 2%, respectively, of total net revenues for the quarter.
-- Cost of revenue was NT$76,772 million for the quarter, down from
NT$77,476 million in 1Q19.
-- Raw material cost totaled NT$41,317 million for the quarter,
representing 46% of total net revenues.
-- Labor cost totaled NT$12,405 million for the quarter, representing
14% of total net revenues.
-- Depreciation, amortization and rental expenses totaled NT$11,524
million for the quarter.
-- Gross margin increased 2.6 percentage points to 15.4% in 2Q19 from 12.8%
in 1Q19.
-- Operating margin was 4.6% in 2Q19 compared to 2.6% in 1Q19.
-- In terms of non-operating items:
-- Net interest expense was NT$909 million.
-- Net foreign exchange loss of NT$340 million was primarily
attributable to the appreciation of U.S. dollar against New Taiwan
dollar.
-- Gain on valuation of financial assets and liabilities was NT$802
million.
-- Net gain on equity-method investments was NT$114 million.
-- Other net non-operating income of NT$614 million was primarily
attributable to gain on revaluation of acquired subsidiary and
miscellaneous incomes. Total non-operating income for the quarter
was NT$281 million.
-- Income before tax was NT$4,424 million for 2Q19, compared to NT$2,635
million in 1Q19. We recorded income tax expenses of NT$1,624 million
for the quarter, compared to NT$405 million in 1Q19.
-- In 2Q19, net income attributable to shareholders of the parent was
NT$2,690 million, compared to net income attributable to shareholders of
the parent of NT$11,463 million in 2Q18 and net income attributable to
shareholders of the parent of NT$2,043 million in 1Q19.
-- Our total number of shares outstanding at the end of the quarter was
4,323,767,932, including treasury stock owned by our subsidiaries. Our
2Q19 basic earnings per share of NT$0.63 (or US$0.041 per ADS) were
based on 4,250,830,053 weighted average numbers of shares outstanding in
2Q19. Our 2Q19 diluted earnings per share of NT$0.62 (or US$0.040 per
ADS) were based on 4,256,798,843 weighted average number of shares
outstanding in 2Q19.
2Q19 Results Highlights - ATM([2])
-- Cost of revenues was NT$48,716 million for the quarter, up by 6%
sequentially.
-- Raw material cost totaled NT$16,169 million for the quarter,
representing 27% of total net revenues.
-- Labor cost totaled NT$11,034 million for the quarter, representing
18% of total net revenues.
-- Depreciation, amortization and rental expenses totaled NT$10,925
million for the quarter.
-- Gross margin increased 3.0 percentage points to 18.5% in 2Q19 from 15.5%
in 1Q19.
-- Operating margin was 6.1% in 2Q19 compared to 2.9% in 1Q19.
2Q19 Results Highlights - EMS
-- lCost of revenues for the quarter was NT$28,657 million, down by 11%
sequentially.
-- Raw material cost totaled NT$25,228 million for the quarter,
representing 80% of total net revenues.
-- Labor cost totaled NT$1,349 million for the quarter, representing 4%
of total net revenues.
-- Depreciation, amortization and rental expenses totaled NT$481
million for the quarter.
-- Gross margin increased to 9.1% in 2Q19 from 8.4% in 1Q19.
-- Operating margin decreased to 1.6% in 2Q19 from 2.1% in 1Q19.
LIQUIDITY AND CAPITAL RESOURCES
-- Capital expenditures in 2Q19 totaled US$444 million, of which US$233
million were used in packaging operations, US$184 million in testing
operations, US$21 million in EMS operations and US$6 million in
interconnect materials operations and others.
-- As of June 30, 2019, total unused credit lines amounted to NT$218,508
million.
-- Current ratio was 1.19 and net debt to equity ratio was 0.62 as of June
30, 2019.
-- Total number of employees was 91,641 as of June 30, 2019, compared to
90,370 as of March 31, 2019.
BUSINESS REVIEW
Customers
ATM CONSOLIDATED BASIS
-- Our five largest customers together accounted for approximately 48% of
our total net revenues in 2Q19, compared to 47% in 1Q19. One customer
accounted for more than 10% of our total net revenues in 2Q19.
-- Our top 10 customers contributed 60% of our total net revenues for the
quarter both in 2Q19 and 1Q19.
-- Our customers that are integrated device manufacturers or IDMs accounted
for 33% of our total net revenues in 2Q19, compared to 35% in 1Q19.
EMS BASIS
-- Our five largest customers together accounted for approximately 73% of
our total net revenues in 2Q19, compared to 75% in 1Q19. One customer
accounted for more than 10% of our total net revenues in 2Q19.
-- Our top 10 customers contributed 85% of our total net revenues during
the quarter in 2Q19, compared to 87% in 1Q19.
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. These forward-looking statements are necessarily estimates reflecting the best judgment of our senior management and our actual results of operations, financial condition or business prospects may differ materially from those expressed or implied by the forward-looking statements for reasons including, among others, 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 shift in United States trade policies; 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 2018 Annual Report on Form 20-F filed on April 26, 2019.
[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.
Supplemental Financial Information
Consolidated Operations
2Q/19
1Q/19
2Q/18
EBITDA (NT$ Millions) 18,072 16,523 24,893
---
ATM Consolidated Operations
2Q/19
1Q/19
2Q/18
Net Revenues (NT$ Millions) 59,790 54,371 54,534
---
Revenues by Application
---
Communication 51% 53% 48%
---
Computer 14% 13% 15%
---
Automotive, Consumer & Others 35% 34% 37%
---
Revenues by Type
---
Bumping, Flip Chip, WLP & SiP 34% 34% 29%
---
Wirebonding 39% 40% 46%
---
Discrete and Others 8% 8% 7%
---
Testing 17% 16% 16%
---
Material 2% 2% 2%
---
Capacity & EBITDA
---
CapEx (US$ Millions)* 423 231 317
---
EBITDA (NT$ Millions) 16,499 14,620 23,306
---
Number of Wirebonders 25,059 25,033 25,216
---
Number of Testers 5,003 4,857 4,726
---
EMS Operations
2Q/19
1Q/19
2Q/18
---
Net Revenues
(NT$
Millions) 31,533 34,959 30,476
Revenues by End Application
---
Communication 40% 29% 38%
---
Computer &
Storage 14% 13% 19%
---
Consumer 24% 38% 25%
---
Industrial 15% 14% 11%
---
Automotive 6% 5% 6%
---
Others 1% 1% 1%
---
Capacity
---
CapEx (US$
Millions)* 21 8 19
---
* 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
2019 2019 2018 2019 2018
Net revenues:
Packaging 47,602 43,857 44,318 91,459 73,686
Testing 10,285 8,951 8,467 19,236 14,146
EMS 31,524 34,947 30,472 66,471 59,158
Others 1,330 1,106 1,244 2,436 2,477
Total net revenues 90,741 88,861 84,501 179,602 149,467
Cost of revenues (76,772) (77,476) (70,791) (154,248) (125,369)
Gross profit 13,969 11,385 13,710 25,354 24,098
Operating expenses:
Research and
development (4,515) (3,955) (3,621) (8,470) (6,396)
Selling, general and
administrative (5,311) (5,137) (4,702) (10,448) (7,999)
Total operating
expenses (9,826) (9,092) (8,323) (18,918) (14,395)
Operating income 4,143 2,293 5,387 6,436 9,703
Net non-operating (expenses) income:
Interest expense -net (909) (966) (819) (1,875) (1,176)
Foreign exchange gain
(loss) (340) (180) (1,469) (520) (967)
Gain (loss) on valuation of financial assets
and liabilities
802 1,556 2,341 2,358 1,962
Gain (loss) on equity-
method investments 114 (154) (201) (40) (645)
Others 614 86 7,681 700 7,819
Total non-operating
income (expenses) 281 342 7,533 623 6,993
Income before tax 4,424 2,635 12,920 7,059 16,696
Income tax expense (1,624) (405) (1,268) (2,029) (2,688)
Income from continuing
operations and 2,800 2,230 11,652 5,030 14,008
before noncontrolling interest
Noncontrolling
interest (110) (187) (189) (297) (449)
Net income attributable to
shareholders of the parent
2,690 2,043 11,463 4,733 13,559
Per share data:
Earnings (losses) per share
- Basic
NT$0.63
NT$0.48
NT$2.70
NT$1.11
NT$3.20
- Diluted
NT$0.62
NT$0.46
NT$2.69
NT$1.08
NT$3.16
Earnings (losses) per equivalent ADS
- Basic
US$0.041
US$0.031
US$0.183
US$0.072
US$0.217
- Diluted
US$0.040
US$0.030
US$0.182
US$0.070
US$0.215
Number of weighted
average shares used
in 4,256,799 4,255,559 4,252,767 4,256,265 4,246,219
diluted EPS calculation (in
thousands)
FX (NTD/USD) 31.04 30.77 29.57 30.90 29.45
ASE Technology Holding Co., Ltd.
Summary of Consolidated Statement of Comprehensive Income Data - ATM
(In NT$ 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
2019 2019 2018 2019 2018
Net revenues:
Packaging 48,329 44,488 44,973 92,817 75,286
Testing 10,286 8,951 8,467 19,237 14,146
Direct Material 944 900 1,059 1,844 2,109
Others 231 32 35 263 65
Total net revenues 59,790 54,371 54,534 114,161 91,606
Cost of revenues (48,716) (45,933) (43,689) (94,649) (73,060)
Gross profit 11,074 8,438 10,845 19,512 18,546
Operating expenses:
Research and
development (3,414) (3,043) (2,670) (6,457) (4,535)
Selling, general and
administrative (4,024) (3,841) (3,577) (7,865) (5,995)
Total operating
expenses (7,438) (6,884) (6,247) (14,322) (10,530)
Operating income 3,636 1,554 4,598 5,190 8,016
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
2019 2019 2018 2019 2018
Net revenues:
Total net revenues 31,533 34,959 30,476 66,492 59,167
Cost of revenues (28,657) (32,029) (27,608) (60,686) (53,599)
Gross profit 2,876 2,930 2,868 5,806 5,568
Operating expenses:
Research and
development (1,125) (940) (969) (2,065) (1,895)
Selling, general and
administrative (1,248) (1,252) (1,088) (2,500) (1,920)
Total operating
expenses (2,373) (2,192) (2,057) (4,565) (3,815)
Operating income 503 738 811 1,241 1,753
ASE Technology Holding Co., Ltd.
Summary of Consolidated Balance Sheet Data
(In NT$ millions)
(Unaudited)
As of Jun. 30 ,
2019 As of Mar. 31 , 2019
===
Current assets:
Cash and cash equivalents 55,090 59,317
Financial assets - current 11,190 11,099
Notes and accounts
receivable 67,242 63,391
Inventories 46,997 45,369
Others 11,144 9,657
Total current assets 191,663 188,833
Financial assets - non
current & Investments -
equity
method 13,160 13,285
Property plant and equipment 219,388 212,639
Right-of-use assets 10,424 10,531
Intangible assets 80,186 79,630
Others 20,017 20,404
Total assets 534,838 525,322
Current liabilities:
Short-term borrowings 49,582 49,207
Current portion of long-
term borrowings 6,291 17,197
Notes and accounts payable 45,295 43,095
Others 59,325 43,523
Total current liabilities 160,493 153,022
Bonds payable 27,219 16,987
Long-term borrowings 112,355 112,038
Other liabilities 17,266 17,378
Total liabilities 317,333 299,425
Shareholders of the parent 199,302 207,766
Noncontrolling interest 18,203 18,131
Total liabilities &
shareholders' equity 534,838 525,322
Current Ratio 1.19 1.23
Net Debt to Equity 0.62 0.58
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
2019 2019 2018 2019 2018
Cash Flows from Operating
Activities:
Profit before income tax 4,424 2,635 12,920 7,059 16,696
Depreciation & amortization 12,637 12,575 10,768 25,212 18,000
Other operating activities
items (5,438) 808 (17,469) (4,630) (19,745)
Net cash generated from 11,623 16,018 6,219 27,641 14,951
operating activities
Cash Flows from Investing
Activities:
Net payments for property, (11,451) (8,878) (11,641) (20,329) (17,188)
plant and equipment
Other investment activities (772) 2,750 (86,682) 1,978 (90,675)
items
Net cash used in investing (12,223) (6,128) (98,323) (18,351) (107,863)
activities
Cash Flows from Financing
Activities:
Total net proceeds from (2,521) (3,172) 120,857 (5,693) 120,353
(repayment of) debts
Other financing activities
items (898) (152) (5,483) (1,050) (7,068)
Net cash generated from (used (3,419) (3,324) 115,374 (6,743) 113,285
in) financing activities
Foreign currency exchange (208) 1,233 1,612 1,025 1,577
effect
Net increase (decrease) in
cash (4,227) 7,799 24,882 3,572 21,950
and cash equivalents
Cash and cash equivalents at
the 59,317 51,518 43,146 51,518 46,078
beginning of period
Cash and cash equivalents at
the 55,090 59,317 68,028 55,090 68,028
end of period
IR Contact:
Iris Wu, Senior 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.
