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ASE Technology Holding Co., Ltd. Reports Unaudited Consolidated Financial Results for the Fourth Quarter and Full Year of 2018


TAIPEI, Taiwan, R.O.C., Jan. 30, 2019 /PRNewswire/ -- ASE Technology Holding Co., Ltd. (TAIEX: 3711, NYSE: ASX) ("We", "ASEH", or the "Company") was established following the completion of the merger between Advanced Semiconductor Engineering, Inc. ("ASE") and Siliconware Precision Industries Co., Ltd. on April 30, 2018. ASE is the Company's predecessor entity; therefore, the financial results of the Company for periods before merger are prepared under the assumption that the Company owned 100% shareholdings of ASE at the very beginning. The financial results after April 30, 2018, including both 4Q18 and 3Q18, reflect full quarters of combined operations following the completion of the merger. The financial results before April 30, 2018 reflect the operations of ASE and its subsidiaries prior to the establishment of the Company. As a result, the Company's financial results for 4Q18 and 3Q18 may not be comparable to that for 4Q17. In addition, the Company's financial results for the year ended December 31, 2018 may not be comparable to that for the year ended December 31, 2017. ASEH, the leading provider of semiconductor manufacturing services in assembly and test, today reported unaudited net revenues[1] of NT$114,028 million for 4Q18, up by 36% year-over-year and up by 6% sequentially. Net income attributable to shareholders of the parent for the quarter totaled NT$5,446 million, down from a net income attributable to shareholders of the parent of NT$6,246 million in 4Q17 and down from a net income attributable to shareholders of the parent of NT$6,257 million in 3Q18. Basic earnings per share for the quarter were NT$1.28 (or US$0.083 per ADS), compared to adjusted basic earnings per share of NT$1.48 for 4Q17 and basic earnings per share of NT$1.47 for 3Q18. Diluted earnings per share for the quarter were NT$1.24 (or US$0.081 per ADS), compared to adjusted diluted earnings per share of NT$1.42 for 4Q17 and diluted earnings per share of NT$1.43 for 3Q18.

For the full year of 2018, the Company reported net revenues of NT$371,092 million and net income attributable to shareholders of the parent of NT$25,262 million. Basic earnings per share for the full year of 2018 were NT$5.95 (or US$0.396 per ADS). Diluted earnings per share for the full year of 2018 were NT$5.84 (or US$0.389 per ADS).

RESULTS OF OPERATIONS

4Q18 Results Highlights -- Consolidated

  • Net revenue contribution from packaging operations, testing operations, EMS operations and others, each represented approximately 45%, 10%, 44% and 1%, respectively, of total net revenues for the quarter.
  • Cost of revenue was NT$95,344 million for the quarter, up from NT$89,216 million in 3Q18.
  • Gross margin decreased 0.7 percentage points to 16.4% in 4Q18 from 17.1% in 3Q18.
  • Operating margin was 7.5% in 4Q18 compared to 7.8% in 3Q18.
  • In terms of non-operating items:
  • Income before tax was NT$7,235 million for 4Q18, compared to NT$8,117 million in 3Q18. We recorded income tax expenses of NT$1,342 million for the quarter, compared to NT$1,554 million in 3Q18.
  • In 4Q18, net income attributable to shareholders of the parent was NT$5,446 million, compared to net income attributable to shareholders of the parent of NT$6,246 million in 4Q17 and net income attributable to shareholders of the parent of NT$6,257 million in 3Q18.
  • Our total number of shares outstanding at the end of the quarter was 4,321,629,382, including treasury stock owned by our subsidiaries. Our 4Q18 basic earnings per share of NT$1.28 (or US$0.083 per ADS) were based on 4,248,272,624 weighted average numbers of shares outstanding in 4Q18. Our 4Q18 diluted earnings per share of NT$1.24 (or US$0.081 per ADS) were based on 4,254,977,677 weighted average number of shares outstanding in 4Q18.

4Q18 Results Highlights -- ATM[2]

  • Cost of revenues was NT$50,158 million for the quarter, down by 4% sequentially.
  • Gross margin increased 0.3 percentage points to 21.8% in 4Q18 from 21.5% in 3Q18.
  • Operating margin was 9.8% in 4Q18 compared to 10.1% in 3Q18.

4Q18 Results Highlights -- EMS

  • Cost of revenues for the quarter was NT$46,135 million, up by 22% sequentially.
  • Gross margin decreased to 9.1% in 4Q18 from 9.9% in 3Q18.
  • Operating margin increased to 4.3% in 4Q18 from 4.1% in 3Q18.

2018 Full-Year Results Highlights -- Consolidated

  • Net revenues for the full year of 2018 amounted to NT$371,092 million, up by 28% from 2017. The revenue contribution from packaging operations, testing operations, EMS operations and others, each represented approximately 48%, 10%, 41% and 1%, respectively, of total net revenues for the year.
  • Cost of revenue for the year of 2018 was NT$309,929 million, compared with NT$237,709 million in 2017.
  • Gross margin decreased 1.7 percentage points to 16.5% in 2018 from 18.2% in 2017.
  • Operating margin decreased to 7.2% in 2018 from 8.7% in 2017.
  • Total non-operating income for the year was NT$5,400 million, compared to total non-operating income of NT$5,711 million for 2017.
  • Income before tax was NT$32,048 million for 2018. We recognized an income tax expense of NT$5,584 million for the year.
  • In 2018, net income attributable to shareholders of the parent amounted to NT$25,262 million, compared with a net income attributable to shareholders of the parent of NT$22,988 million in 2017.
  • Our total number of shares outstanding at the end of the year was 4,321,629,382, including treasury stock owned by our subsidiaries. Our 2018 basic earnings per share of NT$5.95 (or US$0.396 per ADS) were based on 4,245,246,569 weighted average numbers of shares outstanding in 2018. Our 2018 diluted earnings per share of NT$5.84 (or US$0.389 per ADS) were based on 4,251,128,654 weighted average number of shares outstanding in 2018.

2018 Full-Year Results Highlights -- ATM

  • Cost of revenues for the full year of 2018 was NT$175,274 million, compared with NT$121,873 million in 2017.
  • Gross margin decreased to 21.1% in 2018 from 24.3% in 2017.
  • Operating margin decreased to 9.5% in 2018 from 12.3% in 2017.

2018 Full-Year Results Highlights -- EMS

  • Cost of revenues was NT$137,580 million, up by 14% from 2017.
  • Gross margin decreased to 9.4% in 2018 from 10.2% in 2017.
  • Operating margin decreased to 3.7% in 2018 from 4.2% in 2017.

LIQUIDITY AND CAPITAL RESOURCES

  • Capital expenditures in 4Q18 totaled US$248 million, of which US$134 million were used in packaging operations, US$95 million in testing operations, US$11 million in EMS operations and US$8 million in interconnect materials operations and others.
  • For the full year of 2018, we spent US$1,083 million for capital expenditures, including US$602 million in packaging operations, US$403 million in testing operations, US$58 million in EMS operations and US$20 million in interconnect materials operations and others.
  • As of December 31, 2018, total unused credit lines amounted to NT$219,912 million.
  • Current ratio was 1.29 and net debt to equity ratio was 0.60 as of December 31, 2018.
  • Total number of employees was 93,884 as of December 31, 2018, compared to 93,486 as of September 30, 2018.

BUSINESS REVIEW

Customers

ATM CONSOLIDATED BASIS

  • Our five largest customers together accounted for approximately 41% of our total net revenues both in 4Q18 and in 3Q18. One customer accounted for more than 10% of our total net revenues in 4Q18.
  • Our top 10 customers contributed 56% of our total net revenues for the quarter, compared to 55% in 3Q18.
  • Our customers that are integrated device manufacturers or IDMs accounted for 35% of our total net revenues both in 4Q18 and in 3Q18.

EMS BASIS

  • Our five largest customers together accounted for approximately 82% of our total net revenues in 4Q18, compared to 80% in 3Q18. One customer accounted for more than 10% of our total net revenues in 4Q18.
  • Our top 10 customers contributed 91% of our total net revenues during the quarter in 4Q18, compared to 90% in 3Q18.

[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.

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


4Q/18

3Q/18

4Q/17

EBITDA (NT$ Millions)

21,082

21,579

16,147

ATM Consolidated Operations


4Q/18

3Q/18

4Q/17

Net Revenues (NT$ Millions)

64,120

66,324

41,794

Revenues by Application




Communication

56%

54%

48%

Computer

13%

14%

11%

Automotive, Consumer & Others

31%

32%

41%

Revenues by Type




Bumping, Flip Chip, WLP & SiP

33%

31%

28%

Wirebonding

39%

43%

45%

Discrete and Others

9%

8%

9%

Testing

17%

16%

16%

Material

2%

2%

2%

Capacity & EBITDA




CapEx (US$ Millions)*

237

269

133

EBITDA (NT$ Millions)

18,271

19,092

13,508

Number of Wirebonders

25,172

25,219

16,076

Number of Testers

4,822

4,802

3,760

EMS Operations


4Q/18

3Q/18

4Q/17

Net Revenues (NT$ Millions)

50,745

42,009

43,289

Revenues by End Application




Communication

32%

34%

42%

Computer & Storage

10%

14%

14%

Consumer

44%

36%

32%

Industrial

10%

10%

6%

Automotive

4%

5%

5%

Others

0%

1%

1%

Capacity




CapEx (US$ Millions)*

11

21

7

* 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 year ended


Dec. 31

2018


Sep. 30

2018


Dec. 31

2017


Dec. 31

2018


Dec. 31

2017

Net revenues:










Packaging

51,149


53,473


33,045


178,308


126,225

Testing

10,919


10,838


6,553


35,903


26,157

EMS

50,736


41,996


43,285


151,890


133,948

Others

1,224


1,290


1,103


4,991


4,111

Total net revenues

114,028


107,597


83,986


371,092


290,441











Cost of revenues

(95,344)


(89,216)


(69,193)


(309,929)


(237,709)

Gross profit

18,684


18,381


14,793


61,163


52,732











Operating expenses:










Research and development

(4,293)


(4,274)


(3,046)


(14,963)


(11,747)

Selling, general and administrative

(5,818)


(5,735)


(4,041)


(19,552)


(15,767)

Total operating expenses

(10,111)


(10,009)


(7,087)


(34,515)


(27,514)

Operating income

8,573


8,372


7,706


26,648


25,218











Net non-operating (expenses) income:










Interest expense - net

(923)


(971)


(318)


(3,070)


(1,468)

Foreign exchange gain (loss)

(311)


262


780


(1,016)


3,503

Gain (loss) on valuation of financial assets and
     liabilities

 

140


 

(112)


 

(216)


 

1,990


 

(2,782)

Gain (loss) on equity-method investments

6


118


29


(521)


434

Others

(250)


448


(102)


8,017


6,024

Total non-operating income (expenses)

(1,338)


(255)


173


5,400


5,711

Income before tax

7,235


8,117


7,879


32,048


30,929











Income tax expense

(1,342)


(1,554)


(1,085)


(5,584)


(6,261)

Income from continuing operations and
     
before noncontrolling interest

5,893


6,563


6,794


26,464


24,668

Noncontrolling interest

(447)


(306)


(548)


(1,202)


(1,680)











Net income attributable to
     
shareholders of the parent

 

5,446


 

6,257


 

6,246


 

25,262


 

22,988











Per share data[3]:










Earnings (losses) per share










-- Basic

NT$1.28


NT$1.47


NT$1.48


NT$5.95


NT$5.63

-- Diluted

NT$1.24


NT$1.43


NT$1.42


NT$5.84


NT$5.23











Earnings (losses) per equivalent ADS










-- Basic

US$0.083


US$0.096


US$0.098


US$0.396


US$0.370

-- Diluted

US$0.081


US$0.094


US$0.095


US$0.389


US$0.344











Number of weighted average shares used in
     
diluted EPS calculation (in thousands)

4,254,978


4,255,741


4,316,234


4,251,129


4,184,620











FX (NTD/USD)

30.79


30.61


30.08


30.07


30.42











[3] Per share data for the three months and year ended December 31, 2017 has been retrospective adjusted to reflect the impact from the joint share exchange agreement.


 

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 year ended


Dec. 31

2018


Sep. 30

2018


Dec. 31

2017


Dec. 31

2018


Dec. 31

2017

Net revenues:










Packaging

52,068


54,321


34,226


181,675


130,902

Testing

10,920


10,839


6,556


35,905


26,160

Direct Material

1,093


1,134


989


4,336


3,932

Others

39


30


23


134


87

Total net revenues

64,120


66,324


41,794


222,050


161,081











Cost of revenues

(50,158)


(52,056)


(30,932)


(175,274)


(121,873)

Gross profit

13,962


14,268


10,862


46,776


39,208











Operating expenses:










Research and development

(3,349)


(3,257)


(2,125)


(11,141)


(8,361)

Selling, general and administrative

(4,306)


(4,298)


(2,736)


(14,599)


(11,037)

Total operating expenses

(7,655)


(7,555)


(4,861)


(25,740)


(19,398)

Operating income

6,307


6,713


6,001


21,036


19,810











Net non-operating (expenses) income:










Interest expense - net

(949)


(1,032)


(394)


(3,253)


(1,751)

Foreign exchange gain (loss)

(350)


128


822


(1,149)


3,657

Gain (loss) on valuation of financial assets
     and liabilities

 

323


 

(13)


 

(577)


 

2,145


 

(3,762)

Gain (loss) on equity-method investments

1,311


1,230


1,245


2,940


8,505

Others

(239)


329


2


7,970


514

Total non-operating income (expenses)

96


642


1,098


8,653


7,163

Income before tax

6,403


7,355


7,099


29,689


26,973











Income tax expense

(938)


(1,181)


(776)


(4,464)


(3,671)

Income from continuing operations and
     
before noncontrolling interest

5,465


6,174


6,323


25,225


23,302

Noncontrolling interest

(19)


83


(77)


37


(314)











Net income attributable to 
     
shareholders of the parent

 

5,446


 

6,257


 

6,246


 

25,262


 

22,988

 

 

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 year ended


Dec. 31

2018


Sep. 30

2018


Dec. 31

2017


Dec. 31

2018


Dec. 31

2017

Net revenues:










Total net revenues

50,745


42,009


43,289


151,921


134,000











Cost of revenues

(46,135)


(37,846)


(39,287)


(137,580)


(120,354)

Gross profit

4,610


4,163


4,002


14,341


13,646











Operating expenses:










Research and development

(967)


(1,041)


(936)


(3,903)


(3,452)

Selling, general and administrative

(1,463)


(1,388)


(1,208)


(4,771)


(4,536)

Total operating expenses

(2,430)


(2,429)


(2,144)


(8,674)


(7,988)

Operating income

2,180


1,734


1,858


5,667


5,658











Net non-operating (expenses) income:










Total non-operating income

(36)


298


454


580


1,272

Income before tax

2,144


2,032


2,312


6,247


6,930











Income tax expense

(387)


(356)


(324)


(1,061)


(1,204)

Income from continuing operations and
     
before noncontrolling interest

1,757


1,676


1,988


5,186


5,726

Noncontrolling interest

(429)


(397)


(500)


(1,252)


(1,440)











Net income attributable to
     
shareholders of the parent

 

1,328


 

1,279


 

1,488


 

3,934


 

4,286

 

ASE Technology Holding Co., Ltd.

Summary of Consolidated Balance Sheet Data

(In NT$ millions)

(Unaudited)



As of  Dec. 31, 2018


As of  Sep. 30, 2018









Current assets:








Cash and cash equivalents



51,518




55,335

Financial assets -- current



13,802




8,278

Notes and accounts receivable



79,481




79,809

Inventories



46,688




47,153

Others



10,070




10,625

Total current assets



201,559




201,200









Financial assets -- non current & Investments -- equity

  method



 

12,555




 

13,698

Property plant and equipment



214,593




216,200

Intangible assets



80,216




80,857

Prepaid lease payments



10,765




10,500

Others



13,683




13,516

Total assets



533,371




535,971









Current liabilities:








Short-term borrowings



43,264




63,365

Current portion of long-term borrowings & 
     
capital lease obligations



 

10,796




 

24,420

Notes and accounts payable



56,884




60,470

Others



45,355




44,493

Total current liabilities



156,299




192,748









Bonds payable



16,986




16,985

Long-term borrowings & capital lease obligations



127,351




103,386

Other liabilities



12,065




11,719

Total liabilities



312,701




324,838

Shareholders of the parent



203,023




197,330









Noncontrolling interest



17,647




13,803

Total liabilities & shareholders' equity



533,371




535,971

















Current Ratio



1.29




1.04

Net Debt to Equity



0.60




0.68

 

ASE Technology Holding Co., Ltd.

Summary of Consolidated Cash Flow Statements

(In NT$ millions)

(Unaudited)




 For the three months ended


For the year ended



Dec. 31


Sep. 30


Dec.31


Dec. 31


Dec. 31


2018

2018

2017

2018

2017

Cash Flows from Operating Activities:











Profit before income tax


7,235


8,117


7,879


32,048


30,929

Depreciation & amortization


12,220


12,469


7,421


42,689


29,205

Other operating activities items


(920)


(3,312)


(1,138)


(23,977)


(12,703)

Net cash generated from operating activities


18,535


17,274


14,162


50,760


47,431

Cash Flows from Investing Activities:











Net payments for property, plant
     
and equipment


(9,993)


(13,078)


(4,784)


(40,259)


(23,211)

Other investment activities items


(6,230)


7,622


3,178


(89,283)


7,125

Net cash used in investing activities


(16,223)


(5,456)


(1,606)


(129,542)


(16,086)

Cash Flows from Financing Activities:











Total net proceeds from (repayment of)
     debts


(10,208)


(8,177)


(4,899)


101,968


(19,636)

Dividends paid


0


(10,614)


0


(10,614)


(11,214)

Other financing activities items


3,255


(4,115)


323


(7,928)


11,526

Net cash generated from (used in)
     financing activities


(6,953)


(22,906)


(4,576)


83,426


(19,324)

Foreign currency exchange effect


824


(1,605)


(877)


796


(4,336)

Net increase (decrease) in cash
     
and cash equivalents


(3,817)


(12,693)


7,103


5,440


7,685

Cash and cash equivalents at the
     beginning of period


55,335


68,028


38,975


46,078


38,393

Cash and cash equivalents at the
     
end of period


51,518


55,335


46,078


51,518


46,078

 

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

Cision

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