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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.
  • 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:
  • Income before tax was NT$8,117 million for 3Q18, compared to NT$12,920 million in 2Q18We 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.
  • 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.
  • 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 2Q18One 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
 
before noncontrolling interest

6,563


11,652


6,732


20,571


17,874


Noncontrolling interest

(306)


(189)


(396)


(755)


(1,132)













Net income attributable to
 
shareholders of the parent

 

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
 
diluted EPS calculation (in thousands)

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
 
before noncontrolling interest

6,174


11,435


6,421


19,760


16,979


Noncontrolling interest

83


28


(85)


56


(237)













Net income attributable to
 
shareholders of the parent

 

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
 
before noncontrolling interest

1,676


908


1,373


3,429


3,738


Noncontrolling interest

(397)


(219)


(338)


(823)


(940)













Net income attributable to
 
shareholders of the parent

 

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 & 
 capital lease obligations



 

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 
 
and equipment


(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
 
and cash equivalents


(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
 
end of period


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

iris.wu@asetechholding.com

Tel: +886.2.6636.5678

http://www.aseglobal.com

US contact:

Echo Lin, Senior Associate

echo.lin@asetechholding.com

+1.510.687.2491

Grace Teng, Manager

grace_teng@aseglobal.com

Tel: +886.2.6636.5678

 

 

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