Market Overview

ASE Technology Holding Co., Ltd. Reports Unaudited Consolidated Financial Results for the Second Quarter of 2018

Share:

ASE Technology Holding Co., Ltd. Reports Unaudited Consolidated Financial Results for the Second Quarter of 2018

PR Newswire

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

2018


Mar. 31

2018


Jun. 30

2017


Jun. 30

2018


Jun. 30

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
  before noncontrolling interest

11,652


2,356


8,183


14,008


11,142

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    
  
diluted EPS calculation (in thousands)

4,252,767


4,336,571


4,302,312


4,246,219


4,060,994











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

2018


Mar. 31

2018


Jun. 30

2017


Jun. 30

2018


Jun. 30

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       
  before noncontrolling interest

11,435


2,151


7,921


13,586


10,558

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

2018


Mar. 31

2018


Jun. 30

2017


Jun. 30

2018


Jun. 30

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       
  
before noncontrolling interest

908


845


1,218


1,753


2,365

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

2018


Mar. 31

2018


Jun. 30

2017


Jun. 30

2018


Jun. 30

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


Cision 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.

View Comments and Join the Discussion!