ASE Technology Holding Co., Ltd. Reports Unaudited Consolidated Financial Results for the First Quarter of 2020
29 April 2020
TAIPEI, Taiwan, R.O.C., April 29, 2020 /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$97,357 million for 1Q20, up by 10% year-over-year and down by 16% sequentially. Net income attributable to shareholders of the parent for the quarter totaled NT$3,899 million, up from a net income attributable to shareholders of the parent of NT$2,043 million in 1Q19 and down from a net income attributable to shareholders of the parent of NT$6,383 million in 4Q19. Basic earnings per share for the quarter were NT$0.92 (or US$0.061 per ADS), compared to basic earnings per share of NT$0.48 for 1Q19 and basic earnings per share of NT$1.50 for 4Q19. Diluted earnings per share for the quarter were NT$0.89 (or US$0.060 per ADS), compared to diluted earnings per share of NT$0.46 for 1Q19 and diluted earnings per share of NT$1.47 for 4Q19.
RESULTS OF OPERATIONS
1Q20 Results Highlights – Consolidated
- Net revenue contribution from packaging operations, testing operations, EMS operations and others, each represented approximately 53%, 12%, 34% and 1%, respectively, of total net revenues for the quarter.
- Cost of revenue was NT$81,201 million for the quarter, down from NT$96,174 million in 4Q19.
- Raw material cost totaled NT$44,094 million for the quarter, representing 45% of total net revenues.
- Labor cost totaled NT$13,438 million for the quarter, representing 14% of total net revenues.
- Depreciation, amortization and rental expenses totaled NT$11,666 million for the quarter.
- Gross margin decreased 0.5 percentage points to 16.6% in 1Q20 from 17.1% in 4Q19.
- Operating margin was 6.2% in 1Q20, compared to 7.5% in 4Q19.
- In terms of non-operating items:
- Net interest expense was NT$893 million.
- Net foreign exchange loss of NT$324 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$186 million.
- Net loss on equity-method investments was NT$39 million.
- Other net non-operating incomes of NT$244 million were primarily attributable to miscellaneous incomes. Total non-operating expenses for the quarter were NT$826 million.
- Income before tax was NT$5,237 million for 1Q20, compared to NT$8,582 million in 4Q19. We recorded income tax expenses of NT$1,175 million for the quarter, compared to NT$1,779 million in 4Q19.
- In 1Q20, net income attributable to shareholders of the parent was NT$3,899 million, compared to net income attributable to shareholders of the parent of NT$2,043 million in 1Q19 and net income attributable to shareholders of the parent of NT$6,383 million in 4Q19.
- Our total number of shares outstanding at the end of the quarter was 4,334,711,132, including treasury stock owned by our subsidiaries. Our 1Q20 basic earnings per share of NT$0.92 (or US$0.061 per ADS) were based on 4,260,272,327 weighted average numbers of shares outstanding in 1Q20. Our 1Q20 diluted earnings per share of NT$0.89 (or US$0.060 per ADS) were based on 4,280,990,255 weighted average number of shares outstanding in 1Q20.
1Q20 Results Highlights – ATM[2]
- Cost of revenues was NT$52,875 million for the quarter, down by 1% sequentially.
- Raw material cost totaled NT$18,391 million for the quarter, representing 28% of total net revenues.
- Labor cost totaled NT$11,957 million for the quarter, representing 18% of total net revenues.
- Depreciation, amortization and rental expenses totaled NT$11,039 million for the quarter.
- Gross margin decreased 2.6 percentage points to 20.1% in 1Q20 from 22.7% in 4Q19.
- Operating margin was 8.4% in 1Q20, compared to 10.6% in 4Q19.
1Q20 Results Highlights – EMS
- Cost of revenues for the quarter was NT$29,679 million, down by 33% sequentially.
- Raw material cost totaled NT$ 25,600 million for the quarter, representing 78% of total net revenues.
- Labor cost totaled NT$1,403 million for the quarter, representing 4% of total net revenues.
- Depreciation, amortization and rental expenses totaled NT$492 million for the quarter.
- Gross margin increased 0.4 percentage points to 9.3% in 1Q20 from 8.9% in 4Q19.
- Operating margin decreased to 2.4% in 1Q20 from 3.2% in 4Q19.
LIQUIdiTY AND CAPITAL RESOURCES
- Capital expenditures in 1Q20 totaled US$410 million, of which US$237 million were used in packaging operations, US$156 million in testing operations, US$15 million in EMS operations and US$2 million in interconnect materials operations and others.
- As of March 31, 2020, total unused credit lines amounted to NT$241,572 million.
- Current ratio was 1.25 and net debt to equity ratio was 0.71 as of March 31, 2020.
- Total number of employees was 96,296 as of March 31, 2020, compared to 96,528 as of December 31, 2019.
BUSINESS REVIEW
Customers
ATM CONSOLIDATED BASIS
- Our five largest customers together accounted for approximately 49% of our total net revenues in 1Q20, compared to 47% in 4Q19. Two customers each accounted for more than 10% of our total net revenues in 1Q20 individually.
- Our top 10 customers contributed 60% of our total net revenues in 1Q20, compared to 59% in 4Q19.
- Our customers that are integrated device manufacturers or IDMs accounted for 29% of our total net revenues in 1Q20, compared to 30% in 4Q19.
EMS BASIS
- Our five largest customers together accounted for approximately 76% of our total net revenues in 1Q20, compared to 80% in 4Q19. One customer accounted for more than 10% of our total net revenues in 1Q20.
- Our top 10 customers contributed 88% of our total net revenues in 1Q20, compared to 90% in 4Q19.
[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.
Investor Relations Contact:
ir@aseglobal.com
Tel: +886.2.6636.5678
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 2019 Annual Report on Form 20-F filed on March 31, 2020.
Supplemental Financial Information
Consolidated Operations
1Q/20 | 4Q/19 | 1Q/19 | |
EBITDA (NT$ Millions) | 19,061 | 22,543 | 16,523 |
ATM Consolidated Operations
1Q/20 | 4Q/19 | 1Q/19 | ||
Net Revenues (NT$ Millions) | 66,209 | 69,287 | 54,371 | |
Revenues by Application | ||||
Communication | 54% | 54% | 53% | |
Computer | 15% | 16% | 13% | |
Automotive, Consumer & Others | 31% | 30% | 34% | |
Revenues by Type | ||||
Bumping, Flip Chip, WLP & SiP | 38% | 38% | 34% | |
Wirebonding | 36% | 36% | 40% | |
Discrete and Others | 7% | 7% | 8% | |
Testing | 17% | 17% | 16% | |
Material | 2% | 2% | 2% | |
Capacity & EBITDA | ||||
CapEx (US$ Millions)* | 394 | 439 | 231 | |
EBITDA (NT$ Millions) | 17,693 | 20,052 | 14,620 | |
Number of Wirebonders | 24,780 | 25,004 | 25,033 | |
Number of Testers | 5,554 | 5,402 | 4,857 | |
EMS Operations
1Q/20 | 4Q/19 | 1Q/19 | |
Net Revenues (NT$ Millions) | 32,727 | 48,762 | 34,959 |
Revenues by End Application | |||
Communication | 36% | 43% | 29% |
Computer & Storage | 14% | 11% | 13% |
Consumer | 33% | 32% | 38% |
Industrial | 11% | 10% | 14% |
Automotive | 6% | 4% | 5% |
Others | 0% | 0% | 1% |
Capacity | |||
CapEx (US$ Millions)* | 15 | 18 | 8 |
* 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 | ||||||
Mar. 31 2020 | Dec. 31 2019 | Mar. 31 2019 | ||||
Net revenues: | ||||||
Packaging | 51,613 | 53,653 | 43,857 | |||
Testing | 11,563 | 11,930 | 8,951 | |||
EMS | 32,721 | 48,734 | 34,947 | |||
Others | 1,460 | 1,706 | 1,106 | |||
Total net revenues | 97,357 | 116,023 | 88,861 | |||
Cost of revenues | (81,201) | (96,174) | (77,476) | |||
Gross profit | 16,156 | 19,849 | 11,385 | |||
Operating expenses: | ||||||
Research and development | (4,609) | (5,020) | (3,955) | |||
Selling, general and administrative | (5,484) | (6,124) | (5,137) | |||
Total operating expenses | (10,093) | (11,144) | (9,092) | |||
Operating income | 6,063 | 8,705 | 2,293 | |||
Non-operating (expenses) income: | ||||||
Interest expense, net | (893) | (895) | (966) | |||
Foreign exchange gain (loss) | (324) | 1,634 | (180) | |||
Gain (loss) on valuation of financial assets and liabilities | 186 | (693) | 1,556 | |||
Gain (loss) on equity-method investments | (39) | 156 | (154) | |||
Others | 244 | (325) | 86 | |||
Total non-operating income (expenses) | (826) | (123) | 342 | |||
Income before tax | 5,237 | 8,582 | 2,635 | |||
Income tax expense | (1,175) | (1,779) | (405) | |||
Income from continuing operations and | 4,062 | 6,803 | 2,230 | |||
Non-controlling interest | (163) | (420) | (187) | |||
Net income attributable to |
3,899 |
6,383 |
2,043 | |||
Per share data: | ||||||
Earnings (losses) per share | ||||||
– Basic | NT$0.92 | NT$1.50 | NT$0.48 | |||
– Diluted | NT$0.89 | NT$1.47 | NT$0.46 | |||
Earnings (losses) per equivalent ADS | ||||||
– Basic | US$0.061 | US$0.098 | US$0.031 | |||
– Diluted | US$0.060 | US$0.096 | US$0.030 | |||
Number of weighted average shares used in | 4,280,990 | 4,284,201 | 4,255,559 | |||
FX (NTD/USD) | 30.00 | 30.54 | 30.77 | |||
ASE Technology Holding Co., Ltd.
Summary of Consolidated Statement of Comprehensive Income Data – ATM
(In NT$ millions, except per share data)
(Unaudited)
For the three months ended | ||||||
Mar. 31 2020 | Dec. 31 2019 | Mar. 31 2019 | ||||
Net revenues: | ||||||
Packaging | 53,600 | 56,093 | 44,488 | |||
Testing | 11,566 | 11,932 | 8,951 | |||
Direct Material | 1,014 | 1,228 | 900 | |||
Others | 29 | 34 | 32 | |||
Total net revenues | 66,209 | 69,287 | 54,371 | |||
Cost of revenues | (52,875) | (53,590) | (45,933) | |||
Gross profit | 13,334 | 15,697 | 8,438 | |||
Operating expenses: | ||||||
Research and development | (3,648) | (4,001) | (3,043) | |||
Selling, general and administrative | (4,114) | (4,330) | (3,841) | |||
Total operating expenses | (7,762) | (8,331) | (6,884) | |||
Operating income | 5,572 | 7,366 | 1,554 | |||
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 | ||||||
Mar. 31 2020 | Dec. 31 2019 | Mar. 31 2019 | ||||
Net revenues | 32,727 | 48,762 | 34,959 | |||
Cost of revenues | (29,679) | (44,443) | (32,029) | |||
Gross profit | 3,048 | 4,319 | 2,930 | |||
Operating expenses: | ||||||
Research and development | (983) | (1,063) | (940) | |||
Selling, general and administrative | (1,294) | (1,703) | (1,252) | |||
Total operating expenses | (2,277) | (2,766) | (2,192) | |||
Operating income | 771 | 1,553 | 738 | |||
ASE Technology Holding Co., Ltd.
Summary of Consolidated Balance Sheet Data
(In NT$ millions)
(Unaudited)
As of Mar. 31, 2020 | As of Dec. 31, 2019 | |||||||
Current assets: | ||||||||
Cash and cash equivalents | 73,829 | 60,131 | ||||||
Financial assets – current | 5,611 | 4,893 | ||||||
Notes and accounts receivable | 73,573 | 78,948 | ||||||
Inventories | 50,027 | 45,301 | ||||||
Others | 13,575 | 12,728 | ||||||
Total current assets | 216,615 | 202,001 | ||||||
Financial assets – non-current & Investments – equity method |
14,750 |
15,663 | ||||||
Property plant and equipment | 234,419 | 232,093 | ||||||
Right-of-use assets | 9,578 | 9,792 | ||||||
Intangible assets | 77,941 | 78,567 | ||||||
Others | 18,365 | 18,538 | ||||||
Total assets | 571,668 | 556,654 | ||||||
Current liabilities: | ||||||||
Short-term borrowings | 51,620 | 37,339 | ||||||
Current portion of bonds payable and long-term borrowings | 13,725 | 5,363 | ||||||
Notes and accounts payable | 53,944 | 56,066 | ||||||
Others | 53,719 | 53,497 | ||||||
Total current liabilities | 173,008 | 152,265 | ||||||
Bonds payable | 29,276 | 36,272 | ||||||
Long-term borrowings | 134,363 | 135,966 | ||||||
Other liabilities | 17,555 | 17,804 | ||||||
Total liabilities | 354,202 | 342,307 | ||||||
Shareholders of the parent | 203,624 | 200,969 | ||||||
Non-controlling interests | 13,842 | 13,378 | ||||||
Total liabilities & shareholders' equity | 571,668 | 556,654 | ||||||
Current Ratio | 1.25 | 1.33 | ||||||
Net Debt to Equity | 0.71 | 0.73 | ||||||
ASE Technology Holding Co., Ltd.
Summary of Consolidated Cash Flow Statements
(In NT$ millions)
(Unaudited)
For the three months ended | ||||||||||
Mar. 31 | Dec. 31 | Mar. 31 | ||||||||
2020 | 2019 | 2019 | ||||||||
Cash Flows from Operating Activities: | ||||||||||
Income before tax | 5,237 | 8,582 | 2,635 | |||||||
Depreciation & amortization | 12,687 | 12,645 | 12,575 | |||||||
Other operating activities items | (4,476) | 10,356 | 808 | |||||||
Net cash generated from operating activities | 13,448 | 31,583 | 16,018 | |||||||
Cash Flows from Investing Activities: | ||||||||||
Net payments for property, plant and equipment | (13,605) | (17,261) | (8,878) | |||||||
Other investment activities items | (205) | (682) | 2,750 | |||||||
Net cash used in investing activities | (13,810) | (17,943) | (6,128) | |||||||
Cash Flows from Financing Activities: | ||||||||||
Net proceeds from (repayment of) loans | 13,890 | (5,120) | (3,172) | |||||||
Other financing activities items | 194 | (7,211) | (152) | |||||||
Net cash generated from (used in) financing activities | 14,084 | (12,331) | (3,324) | |||||||
Foreign currency exchange effect | (24) | (2,398) | 1,233 | |||||||
Net increase (decrease) in cash and cash equivalents | 13,698 | (1,089) | 7,799 | |||||||
Cash and cash equivalents at the beginning of period | 60,131 | 61,220 | 51,518 | |||||||
Cash and cash equivalents at the end of period | 73,829 | 60,131 | 59,317 | |||||||
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SOURCE ASE Technology Holding Co., Ltd.
