ASE Technology Holding Co., Ltd. Reports Unaudited Consolidated Financial Results for the Second Quarter of 2020

dnrt8765

TAIPEI, Taiwan, R.O.C., July 31, 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$107,549 million for 2Q20, up by 19% year-over-year and up by 11% sequentially. Net income attributable to shareholders of the parent for the quarter totaled NT$6,937 million, up from a net income attributable to shareholders of the parent of NT$2,690 million in 2Q19 and up from a net income attributable to shareholders of the parent of NT$3,899 million in 1Q20. Basic earnings per share for the quarter were NT$1.63 (or US$0.109 per ADS), compared to basic earnings per share of NT$0.63 for 2Q19 and basic earnings per share of NT$0.92 for 1Q20. Diluted earnings per share for the quarter were NT$1.60 (or US$0.107 per ADS), compared to diluted earnings per share of NT$0.62 for 2Q19 and diluted earnings per share of NT$0.89 for 1Q20.

RESULTS OF OPERATIONS

2Q20 Results Highlights – Consolidated

  • Net revenue contribution from packaging operations, testing operations, EMS operations and others, each represented approximately 50%, 12%, 37% and 1%, respectively, of total net revenues for the quarter.
  • Cost of revenue was NT$88,740 million for the quarter, up from NT$81,201 million in 1Q20.
    • Raw material cost totaled NT$50,216 million for the quarter, representing 47% of total net revenues.
    • Labor cost totaled NT$13,477 million for the quarter, representing 13% of total net revenues.
    • Depreciation, amortization and rental expenses totaled NT$11,699 million for the quarter.
  • Gross margin increased 0.9 percentage points to 17.5% in 2Q20 from 16.6% in 1Q20.
  • Operating margin was 7.8% in 2Q20, compared to 6.2% in 1Q20.
  • In terms of non-operating items:
    • Net interest expense was NT$771 million.
    • Net foreign exchange gain of NT$718 million was primarily attributable to the depreciation of U.S. dollar against New Taiwan dollar.
    • Loss on valuation of financial assets and liabilities was NT$17 million.
    • Net gain on equity-method investments was NT$105 million.
    • Other net non-operating income of NT$417 million were primarily attributable to miscellaneous incomes. Total non-operating income for the quarter were NT$452 million.
  • Income before tax was NT$8,879 million for 2Q20, compared to NT$5,237 million in 1Q20.  We recorded income tax expenses of NT$1,646 million for the quarter, compared to NT$1,175 million in 1Q20.
  • In 2Q20, net income attributable to shareholders of the parent was NT$6,937 million, compared to net income attributable to shareholders of the parent of NT$2,690 million in 2Q19 and net income attributable to shareholders of the parent of NT$3,899 million in 1Q20.
  • lOur total number of shares outstanding at the end of the quarter was 4,338,345,132, including treasury stock owned by our subsidiaries. Our 2Q20 basic earnings per share of NT$1.63 (or US$0.109 per ADS) were based on 4,265,407,583 weighted average numbers of shares outstanding in 2Q20. Our 2Q20 diluted earnings per share of NT$1.60 (or US$0.107 per ADS) were based on 4,273,769,436 weighted average number of shares outstanding in 2Q20.

2Q20 Results Highlights – ATM[2]

  • Cost of revenues was NT$54,434 million for the quarter, up by 3% sequentially.
    • Raw material cost totaled NT$19,026 million for the quarter, representing 27% of total net revenues.
    • Labor cost totaled NT$12,045 million for the quarter, representing 17% of total net revenues.
    • Depreciation, amortization and rental expenses totaled NT$11,080 million for the quarter.
  • Gross margin increased 1.6 percentage points to 21.7% in 2Q20 from 20.1% in 1Q20.
  • Operating margin was 10.4% in 2Q20, compared to 8.4% in 1Q20.

2Q20 Results Highlights – EMS

  • Cost of revenues for the quarter was NT$35,979 million, up by 21% sequentially.
    • Raw material cost totaled NT$31,081 million for the quarter, representing 78% of total net revenues.
    • Labor cost totaled NT$1,358 million for the quarter, representing 3% of total net revenues.
    • Depreciation, amortization and rental expenses totaled NT$487 million for the quarter.
  • Gross margin increased 0.1 percentage points to 9.4% in 2Q20 from 9.3% in 1Q20.
  • Operating margin increased to 3.1% in 2Q20 from 2.4% in 1Q20.

LIQUIdiTY AND CAPITAL RESOURCES

  • Capital expenditures in 2Q20 totaled US$495 million, of which US$287 million were used in packaging operations, US$133 million in testing operations, US$70 million in EMS operations and US$5 million in interconnect materials operations and others.
  • As of June 30, 2020, total unused credit lines amounted to NT$253,777 million.
  • Current ratio was 1.17 and net debt to equity ratio was 0.70 as of June 30, 2020.
  • Total number of employees was 95,448 as of June 30, 2020, compared to 96,296 as of March 31, 2020.

Business Review

Customers

ATM consolidated Basis

  • Our five largest customers together accounted for approximately 50% of our total net revenues in 2Q20, compared to 49% in 1Q20. Two customers each accounted for more than 10% of our total net revenues in 2Q20 individually.
  • Our top 10 customers both contributed 61% of our total net revenues in 2Q20 and 1Q20.
  • Our customers that are integrated device manufacturers or IDMs both accounted for 29% of our total net revenues in 2Q20 and 1Q20. 

EMS Basis

  • Our five largest customers together accounted for approximately 78% of our total net revenues in 1Q20, compared to 76% in 1Q20.  One customer accounted for more than 10% of our total net revenues in 2Q20.
  • Our top 10 customers contributed 89% of our total net revenues in 2Q20, compared to 88% in 1Q20.

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 moreinformation, please visit our website at https://www.aseglobal.com.

Investor Relations Contact:

ir@aseglobal.com
Tel: +886.2.6636.5678
https://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

2Q/20

1Q/20



2Q/19

EBITDA (NT$ Millions)

22,488

19,061

18,072



ATM Consolidated Operations

2Q/20

1Q/20

2Q/19

Net Revenues (NT$ Millions)



69,516

66,209

59,594

Revenues by Application

Communication



54%

54%

51%

Computer

14%



15%

14%

Automotive, Consumer & Others

32%

31%



35%

Revenues by Type

Bumping, Flip Chip, WLP & SiP

38%

38%



34%

Wirebonding

35%

36%

39%



Discrete and Others

7%

7%

8%

Testing



18%

17%

17%

Material

2%



2%

2%

Capacity & EBITDA

CapEx (US$ Millions)*

424



394

423

EBITDA (NT$ Millions)

20,037

17,693



16,512

Number of Wirebonders

24,667

24,780

25,059



Number of Testers

5,790

5,554

5,003

EMS Operations



2Q/20

1Q/20

2Q/19

Net Revenues (NT$ Millions)

39,709



32,727

31,533

Revenues by End Application

Communication

46%



36%

40%

Computer & Storage

12%

14%



14%

Consumer

28%

33%

24%



Industrial

10%

11%

15%

Automotive



3%

6%

6%

Others

1%



0%

1%

Capacity 

CapEx (US$ Millions)*

70



15

21

* 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

2020

Mar. 31

2020

Jun. 30



2019

Jun. 30

2020

Jun. 30

2019



Net revenues:

Packaging

53,622

51,613

47,602



105,235

91,459

Testing

12,690

11,563



10,285

24,253

19,236

EMS

39,703



32,721

31,524

72,424

66,471

Others



1,534

1,460

1,330

2,994

2,436



Total net revenues

107,549

97,357

90,741

204,906



179,602

Cost of revenues

(88,740)

(81,201)

(76,772)



(169,941)

(154,248)

Gross profit

18,809

16,156



13,969

34,965

25,354

Operating expenses:

Research and development



(4,837)

(4,609)

(4,515)

(9,446)

(8,470)



Selling, general and administrative

(5,545)

(5,484)

(5,311)

(11,029)



(10,448)

Total operating expenses

(10,382)

(10,093)

(9,826)



(20,475)

(18,918)

Operating income

8,427

6,063



4,143

14,490

6,436

Net non-operating (expenses) income:

Interest expense – net



(771)

(893)

(909)

(1,664)

(1,875)



Foreign exchange gain (loss)

718

(324)

(340)

394



(520)

Gain (loss) on valuation of financial assets
  and liabilities

 

(17)

 



186

 

802

 

169



 

2,358

Gain (loss) on equity-method investments

105

(39)



114

66

(40)

Others

417



244

614

661

700

Total non-operating income (expenses)



452

(826)

281

(374)

623



Income before tax

8,879

5,237

4,424

14,116



7,059

Income tax expense

(1,646)

(1,175)

(1,624)



(2,821)

(2,029)

Income from continuing operations and
 
before noncontrolling interest

7,233

4,062



2,800

11,295

5,030

Noncontrolling interest

(296)



(163)

(110)

(459)

(297)

Net income attributable to
 
shareholders of the parent



 

6,937

 

3,899

 



2,690

 

10,836

 

4,733



Per share data:

Earnings (losses) per share

– Basic

NT$1.63

NT$0.92



NT$0.63

NT$2.54

NT$1.11

– Diluted

NT$1.60



NT$0.89

NT$0.62

NT$2.49

NT$1.08

Earnings (losses) per equivalent ADS



– Basic

US$0.109

US$0.061

US$0.041

US$0.170



US$0.072

– Diluted

US$0.107

US$0.060

US$0.040



US$0.166

US$0.070

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

4,273,770

4,280,990



4,256,799

4,279,072

4,256,265

FX (NTD/USD)

29.94



30.01

31.04

29.97

30.90

 

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

2020

Mar. 31

2020



Jun. 30

2019

Jun. 30

2020

Jun. 30



2019

Net revenues:

Packaging

55,732

53,600



48,329

109,332

92,817

Testing

12,693



11,566

10,286

24,259

19,237

Direct Material



1,051

1,014

944

2,065

1,844



Others

40

29

35

69



67

Total net revenues

69,516

66,209

59,594



135,725

113,965

Cost of revenues

(54,434)

(52,875)



(48,494)

(107,309)

(94,427)

Gross profit

15,082



13,334

11,100

28,416

19,538

Operating expenses:



Research and development

(3,777)

(3,648)

(3,414)

(7,425)



(6,457)

Selling, general and administrative

(4,081)

(4,114)

(4,020)



(8,195)

(7,861)

Total operating expenses

(7,858)

(7,762)



(7,434)

(15,620)

(14,318)

Operating income

7,224



5,572

3,666

12,796

5,220

 

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

2020

Mar. 31

2020



Jun. 30

2019

Jun. 30

2020

Jun. 30



2019

Net revenues:

Total net revenues

39,709

32,727



31,533

72,436

66,492

Cost of revenues

(35,979)



(29,679)

(28,657)

(65,658)

(60,686)

Gross profit



3,730

3,048

2,876

6,778

5,806



Operating expenses:

Research and development

(1,085)

(983)

(1,125)



(2,068)

(2,065)

Selling, general and administrative

(1,403)

(1,294)



(1,248)

(2,697)

(2,500)

Total operating expenses

(2,488)



(2,277)

(2,373)

(4,765)

(4,565)

Operating income



1,242

771

503

2,013

1,241



 

ASE Technology Holding Co., Ltd.

Summary of Consolidated Balance Sheet Data

(In NT$ millions)

(Unaudited)



As of Jun. 30, 2020

As of Mar. 31, 2020

Current assets:

Cash and cash equivalents

58,223



73,829

Financial assets – current

5,483

5,611

Notes and accounts receivable



73,763

73,573

Inventories

50,649

50,027



Others

14,395

13,575

Total current assets

202,513



216,615

Financial assets – non-current & Investments – equity

  method

 

12,950



 

14,750

Property plant and equipment

238,757

234,419



Right-of-use assets

9,091

9,578

Intangible assets

77,154



77,941

Others

18,127

18,365

Total assets



558,592

571,668

Current liabilities:

Short-term borrowings

42,312



51,620

Current portion of bonds payable & Current portion of
   long-term borrowings[3]

11,366

13,725

Notes and accounts payable



54,400

53,944

Others

64,547

53,719



Total current liabilities

172,625

173,008

Bonds payable

39,263



29,276

Long-term borrowings[4]

115,518

134,363

Other liabilities



17,251

17,555

Total liabilities

344,657

354,202



Shareholders of the parent

200,409

203,624

Non-controlling interests

13,526



13,842

Total liabilities & shareholders’ equity

558,592

571,668

Current Ratio



1.17

1.25

Net Debt to Equity Ratio

0.70

0.71



     

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

Mar. 31

Jun. 30



Jun. 30

Jun. 30

2020

2020

2019



2020

2019

Cash Flows from Operating Activities:

Profit before income tax

8,879



5,237

4,424

14,116

7,059

Depreciation & amortization



12,785

12,687

12,637

25,472

25,212



Other operating activities items

(1,659)

(4,476)

(5,438)

(6,135)



(4,630)

Net cash generated from
   operating activities

20,005

13,448

11,623



33,453

27,641

Cash Flows from Investing Activities:

Net payments for property,
   plant and equipment

(16,587)



(13,605)

(11,451)

(30,192)

(20,329)

Other investment activities
   items



1,902

(205)

(774)

1,697

1,976



Net cash used in investing
   activities

(14,685)

(13,810)

(12,225)

(28,495)



(18,353)

Cash Flows from Financing
   Activities:

Total net proceeds from
   (repayment of) borrowings

(18,900)

13,890



(2,521)

(5,010)

(5,693)

Other financing activities items

(457)



194

(896)

(263)

(1,048)

Net cash generated from (used
   in) financing activities



(19,357)

14,084

(3,417)

(5,273)

(6,741)



Foreign currency exchange
   effect

(1,569)

(24)

(208)

(1,593)



1,025

Net increase (decrease) in cash
   and cash equivalents

(15,606)

13,698

(4,227)



(1,908)

3,572

Cash and cash equivalents at the
   beginning of period

73,829

60,131



59,317

60,131

51,518

Cash and cash equivalents at the
   end of period

58,223



73,829

55,090

58,223

55,090

 

 

[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] Current portion of long-term borrowings include long-term loans and notes payable.

[4] Long-term borrowings include long-term loans and bills payable.



 

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SOURCE ASE Technology Holding Co., Ltd.

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