ASE Technology Holding Co., Ltd. Reports Unaudited Consolidated Financial Results for the Third Quarter of 2019
TAIPEI, Taiwan, R.O.C., Oct. 30, 2019 /PRNewswire/ -- ASE Technology Holding Co., Ltd. (TAIEX: 3711, NYSE: ASX) ("We", "ASEH", or the "Company"), the leading provider of semiconductor manufacturing services in assembly and test, today reported unaudited net revenues((1)) of NT$117,557 million for 3Q19, up by 9% year-over-year and up by 30% sequentially. Net income attributable to shareholders of the parent for the quarter totaled NT$5,734 million, down from a net income attributable to shareholders of the parent of NT$6,257 million in 3Q18 and up from a net income attributable to shareholders of the parent of NT$2,690 million in 2Q19. Basic earnings per share for the quarter were NT$1.35 (or US$0.087 per ADS), compared to basic earnings per share of NT$1.47 for 3Q18 and NT$0.63 for 2Q19. Diluted earnings per share for the quarter were NT$1.33 (or US$0.085 per ADS), compared to diluted earnings per share of NT$1.43 for 3Q18 and NT$0.62 for 2Q19.
RESULTS OF OPERATIONS
3Q19 Results Highlights - Consolidated
-- Net revenue contribution from packaging operations, testing operations,
EMS operations and others, each represented approximately 46%, 10%, 43%
and 1%, respectively, of total net revenues for the quarter.
-- Cost of revenue was NT$98,449 million for the quarter, up from NT$76,772
million in 2Q19.
-- Raw material cost totaled NT$60,159 million for the quarter,
representing 51% of total net revenues.
-- Labor cost totaled NT$13,308 million for the quarter, representing
11% of total net revenues.
-- Depreciation, amortization and rental expenses totaled NT$11,480
million for the quarter.
-- Gross margin increased 0.9 percentage points to 16.3% in 3Q19 from 15.4%
in 2Q19.
-- Operating margin was 7.1% in 3Q19 compared to 4.6% in 2Q19.
-- In terms of non-operating items:
-- Net interest expense was NT$866 million.
-- Net foreign exchange gain of NT$12 million was primarily
attributable to the depreciation of U.S. dollar against New Taiwan
dollar.
-- Loss on valuation of financial assets and liabilities was NT$19
million.
-- Net gain on equity-method investments was NT$148 million.
-- Other net non-operating income of NT$61 million was primarily
attributable to miscellaneous incomes. Total non-operating expense
for the quarter was NT$664 million.
-- Income before tax was NT$7,721 million for 3Q19, compared to NT$4,424
million in 2Q19. We recorded income tax expenses of NT$1,501 million
for the quarter, compared to NT$1,624 million in 2Q19.
-- In 3Q19, net income attributable to shareholders of the parent was
NT$5,734 million, compared to net income attributable to shareholders of
the parent of NT$6,257 million in 3Q18 and net income attributable to
shareholders of the parent of NT$2,690 million in 2Q19.
-- Our total number of shares outstanding at the end of the quarter was
4,325,402,582, including treasury stock owned by our subsidiaries. Our
3Q19 basic earnings per share of NT$1.35 (or US$0.087 per ADS) were
based on 4,252,217,297 weighted average numbers of shares outstanding in
3Q19. Our 3Q19 diluted earnings per share of NT$1.33 (or US$0.085 per
ADS) were based on 4,261,515,344 weighted average numbers of shares
outstanding in 3Q19.
3Q19 Results Highlights - ATM((2)(3))
-- Cost of revenues was NT$53,193 million for the quarter, up by 10%
sequentially.
-- Raw material cost totaled NT$18,466 million for the quarter,
representing 27% of total net revenues.
-- Labor cost totaled NT$11,762 million for the quarter, representing
17% of total net revenues.
-- Depreciation, amortization and rental expenses totaled NT$10,844
million for the quarter.
-- Gross margin increased 3.1 percentage points to 21.7% in 3Q19 from 18.6%
in 2Q19.
-- Operating margin was 9.4% in 3Q19 compared to 6.2% in 2Q19.
3Q19 Results Highlights - EMS
-- Cost of revenues for the quarter was NT$46,105 million, up by 61%
sequentially.
-- Raw material cost totaled NT$41,613 million for the quarter,
representing 82% of total net revenues.
-- Labor cost totaled NT$1,472 million for the quarter, representing 3%
of total net revenues.
-- Depreciation, amortization and rental expenses totaled NT$483
million for the quarter.
-- Gross margin decreased to 8.9% in 3Q19 from 9.1% in 2Q19.
-- Operating margin increased to 4.1% in 3Q19 from 1.6% in 2Q19.
LIQUIDITY AND CAPITAL RESOURCES
-- Capital expenditures in 3Q19 totaled US$436 million, of which US$181
million were used in packaging operations, US$229 million in testing
operations, US$23 million in EMS operations and US$3 million in
interconnect materials operations and others.
-- As of September 30, 2019, total unused credit lines amounted to
NT$196,993 million.
-- Current ratio was 1.14 and net debt to equity ratio was 0.73 as of
September 30, 2019.
-- Total number of employees was 94,675 as of September 30, 2019, compared
to 91,641 as of June 30, 2019.
BUSINESS REVIEW
Customers
ATM CONSOLIDATED BASIS( (3))
-- Our five largest customers together accounted for approximately 46% of
our total net revenues in 3Q19, compared to 48% in 2Q19. One customer
accounted for more than 10% of our total net revenues in 3Q19.
-- Our top 10 customers contributed 58% of our total net revenues for the
quarter, compared to 60% in 2Q19.
-- Our customers that are integrated device manufacturers or IDMs accounted
for 33% of our total net revenues both in 3Q19 and 2Q19.
EMS BASIS
-- Our five largest customers together accounted for approximately 82% of
our total net revenues in 3Q19, compared to 73% in 2Q19. One customer
accounted for more than 10% of our total net revenues in 3Q19.
-- Our top 10 customers contributed 90% of our total net revenues during
the quarter in 3Q19, compared to 85% in 2Q19.
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.
([3]) The ATM results presented have
been retrospectively adjusted to
exclude a portion of the results
related to manufacturing integrated
circuits from an acquired subsidiary
consolidated since May 2019.
Investor Relations Contact:
ir@aseglobal.com
Tel: +886.2.6636.5678
http://www.aseglobal.com
Supplemental Financial Information
Consolidated Operations
3Q/19
2Q/19
3Q/18
EBITDA (NT$ Millions) 21,214 18,072 21,579
---
ATM Consolidated Operations( (3))
3Q/19
2Q/19
3Q/18
---
Net Revenues (NT$
Millions) 67,901 59,594 66,324
---
Revenues by Application
---
Communication 53% 51% 51%
---
Computer 14% 14% 14%
---
Automotive, Consumer &
Others 33% 35% 35%
---
Revenues by Type
---
Bumping, Flip Chip, WLP
& SiP 35% 34% 31%
---
Wirebonding 37% 39% 43%
---
Discrete and Others 9% 8% 8%
---
Testing 17% 17% 16%
---
Material 2% 2% 2%
---
Capacity & EBITDA
---
CapEx (US$ Millions)* 413 423 269
---
EBITDA (NT$ Millions) 18,312 16,512 19,092
---
Number of Wirebonders 25,008 25,059 25,219
---
Number of Testers 5,254 5,003 4,802
---
(3) The ATM results presented have been retrospectively adjusted to exclude a portion of the
results related to manufacturing integrated circuits
from an acquired subsidiary consolidated since May 2019.
EMS Operations
3Q/19
2Q/19
3Q/18
---
Net Revenues
(NT$
Millions) 50,599 31,533 42,009
Revenues by End Application
---
Communication 36% 40% 34%
---
Computer &
Storage 9% 14% 14%
---
Consumer 41% 24% 36%
---
Industrial 9% 15% 10%
---
Automotive 4% 6% 5%
---
Others 1% 1% 1%
---
Capacity
---
CapEx (US$
Millions)* 23 21 21
---
* 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
2019 2019 2018 2019 2018
Net revenues:
Packaging 53,804 47,602 53,473 145,263 127,159
Testing 11,493 10,285 10,838 30,729 24,984
EMS 50,584 31,524 41,996 117,055 101,154
Others 1,676 1,330 1,290 4,112 3,767
Total net revenues 117,557 90,741 107,597 297,159 257,064
Cost of revenues (98,449) (76,772) (89,216) (252,697) (214,585)
Gross profit 19,108 13,969 18,381 44,462 42,479
Operating expenses:
Research and
development (4,906) (4,515) (4,274) (13,376) (10,670)
Selling, general and
administrative (5,817) (5,311) (5,735) (16,265) (13,734)
Total operating
expenses (10,723) (9,826) (10,009) (29,641) (24,404)
Operating income 8,385 4,143 8,372 14,821 18,075
Net non-operating income (expenses):
Interest expense -net (866) (909) (971) (2,741) (2,147)
Foreign exchange gain
(loss) 12 (340) 262 (508) (705)
Gain (loss) on valuation of financial assets
and liabilities
(19) 802 (112) 2,339 1,850
Gain (loss) on equity-
method investments 148 114 118 108 (527)
Others 61 614 448 761 8,267
Total non-operating
income (expenses) (664) 281 (255) (41) 6,738
Income before tax 7,721 4,424 8,117 14,780 24,813
Income tax expense (1,501) (1,624) (1,554) (3,530) (4,242)
Income from continuing
operations and 6,220 2,800 6,563 11,250 20,571
b
efore noncontrolling
interest
Noncontrolling
interest (486) (110) (306) (783) (755)
Net income attributable to
shareholders of the parent
5,734 2,690 6,257 10,467 19,816
===
Per share data:
Earnings (losses) per share
- Basic
NT$1.35
NT$0.63
NT$1.47
NT$2.46
NT$4.67
- Diluted
NT$1.33
NT$0.62
NT$1.43
NT$2.40
NT$4.60
Earnings (losses) per equivalent ADS
- Basic
US$0.087
US$0.041
US$0.096
US$0.159
US$0.313
- Diluted
US$0.085
US$0.040
US$0.094
US$0.155
US$0.308
Number of weighted
average shares used
in 4,261,515 4,256,799 4,255,741 4,256,985 4,249,525
diluted EPS calculation (in
thousands)
FX (NTD/USD) 31.17 31.04 30.61 30.99 29.83
ASE Technology Holding Co., Ltd.
Summary of Consolidated Statement of Comprehensive Income Data - ATM(3)
(In NT$ 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
2019 2019 2018 2019 2018
Net revenues:
Packaging 55,163 48,329 54,321 147,980 129,607
Testing 11,495 10,286 10,839 30,732 24,985
Direct Material 1,211 944 1,134 3,055 3,243
Others 32 35 30 100 95
Total net revenues 67,901 59,594 66,324 181,867 157,930
Cost of revenues (53,193) (48,494) (52,056) (147,620) (125,116)
Gross profit 14,708 11,100 14,268 34,247 32,814
Operating expenses:
Research and
development (3,894) (3,414) (3,257) (10,351) (7,792)
Selling, general and
administrative (4,401) (4,020) (4,298) (12,262) (10,293)
Total operating
expenses (8,295) (7,434) (7,555) (22,613) (18,085)
Operating income 6,413 3,666 6,713 11,634 14,729
(3) The ATM results presented have been retrospectively adjusted to exclude a portion of the results related to manufacturing integrated circuits
from an acquired subsidiary consolidated since May 2019.
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
2019 2019 2018 2019 2018
Net revenues:
Total net revenues 50,599 31,533 42,009 117,091 101,176
Cost of revenues (46,105) (28,657) (37,846) (106,791) (91,445)
Gross profit 4,494 2,876 4,163 10,300 9,731
Operating expenses:
Research and
development (1,042) (1,125) (1,041) (3,107) (2,936)
Selling, general and
administrative (1,353) (1,248) (1,388) (3,853) (3,308)
Total operating
expenses (2,395) (2,373) (2,429) (6,960) (6,244)
Operating income 2,099 503 1,734 3,340 3,487
ASE Technology Holding Co., Ltd.
Summary of Consolidated Balance Sheet Data
(In NT$ millions)
(Unaudited)
As of Sep. 30 ,
2019 As of Jun. 30 , 2019
===
Current assets:
Cash and cash equivalents 61,220 55,090
Financial assets - current 6,583 11,190
Notes and accounts
receivable 83,743 67,242
Inventories 48,427 46,997
Others 12,472 11,144
Total current assets 212,445 191,663
Financial assets - non
current & Investments -
equity
method 15,076 13,160
Property plant and equipment 226,302 219,388
Right-of-use assets 9,961 10,424
Intangible assets 79,278 80,186
Others 19,916 20,017
Total assets 562,978 534,838
Current liabilities:
Short-term borrowings 70,896 49,582
Current portion of long-
term borrowings 10,017 6,291
Notes and accounts payable 56,385 45,295
Others 49,129 59,325
Total current liabilities 186,427 160,493
Bonds payable 27,223 27,219
Long-term borrowings 113,775 112,355
Other liabilities 17,138 17,266
Total liabilities 344,563 317,333
Shareholders of the parent 201,510 199,302
Noncontrolling interest 16,905 18,203
Total liabilities &
shareholders'
equity 562,978 534,838
Current Ratio 1.14 1.19
Net Debt to Equity 0.73 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
2019 2019 2018 2019 2018
Cash Flows from Operating
Activities:
Profit before income tax 7,721 4,424 8,117 14,780 24,813
Depreciation & amortization 12,610 12,637 12,469 37,822 30,469
Other operating activities
items (7,250) (5,438) (3,312) (11,880) (23,057)
Net cash generated from
operating 13,081 11,623 17,274 40,722 32,225
activities
Cash Flows from Investing
Activities:
Net payments for property,
plant (18,771) (11,451) (13,078) (39,100) (30,266)
and equipment
Other investment activities
items 488 (774) 7,622 2,464 (83,053)
Net cash used in investing
activities (18,283) (12,225) (5,456) (36,636) (113,319)
Cash Flows from Financing
Activities:
Total net proceeds from 26,553 (2,521) (8,177) 20,860 112,176
(repayment of) debts
Dividends paid (10,623) (10,614) (10,623) (10,614)
Other financing activities
items (3,509) (896) (4,115) (4,557) (11,183)
Net cash generated from (used
in) 12,421 (3,417) (22,906) 5,680 90,379
financing activities
Foreign currency exchange
effect (1,089) (208) (1,605) (64) (28)
Net increase (decrease) in cash
and 6,130 (4,227) (12,693) 9,702 9,257
cash equivalents
Cash and cash equivalents at
the 55,090 59,317 68,028 51,518 46,078
beginning of period
Cash and cash equivalents at
the end 61,220 55,090 55,335 61,220 55,335
of period
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SOURCE ASE Technology Holding Co., Ltd.
