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 2018 |
Jun. 30 2018 |
Sep. 30 2017 |
Sep. 30 2018 |
Sep. 30 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 |
|||||
Noncontrolling interest |
(306) |
(189) |
(396) |
(755) |
(1,132) |
|||||
Net income attributable to |
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$0.248 |
|||||
Number of weighted average shares used in |
4,255,741 |
4,252,767 |
4,312,402 |
4,249,525 |
4,133,048 |
|||||
FX (NTD/USD) |
30.61 |
29.57 |
30.22 |
29.83 |
30.54 |
ASE Technology Holding Co., Ltd. |
||||||||||
Summary of Consolidated Statement of Comprehensive Income Data – ATM |
||||||||||
(In NT$ millions, except per share data) |
||||||||||
(Unaudited) |
||||||||||
For the three months ended |
For the nine months ended |
|||||||||
Sep. 30 2018 |
Jun. 30 2018 |
Sep. 30 2017 |
Sep. 30 2018 |
Sep. 30 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 |
|||||
Noncontrolling interest |
83 |
28 |
(85) |
56 |
(237) |
|||||
Net income attributable to |
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 2018 |
Jun. 30 2018 |
Sep. 30 2017 |
Sep. 30 2018 |
Sep. 30 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 |
|||||
Noncontrolling interest |
(397) |
(219) |
(338) |
(823) |
(940) |
|||||
Net income attributable to |
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 & |
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) |
||||||||
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 |
||||||||
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 |
||||||||
[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 Tel: +886.2.6636.5678 |
US contact: Echo Lin, Senior Associate +1.510.687.2491 |
Grace Teng, Manager Tel: +886.2.6636.5678
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SOURCE ASE Technology Holding Co., Ltd.
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