ASE Technology Holding Co., Ltd. Reports Its Unaudited Consolidated Financial Results for the Third Quarter of 2022

Rhea-AI Summary

ASE Technology Holding reported strong financial results for 3Q22, with unaudited net revenues of NT$188,626 million, marking a 25% year-over-year increase. Net income attributable to shareholders rose to NT$17,465 million, up from NT$14,176 million in 3Q21. Basic earnings per share reached NT$4.03, a rise from NT$3.29 year-over-year. Despite growth, gross margin decreased slightly to 20.1%. Notably, five customers contributed 45% to revenues, underscoring customer concentration risk. Capital expenditures were US$400 million, indicating ongoing investment in growth.

Positive

• Net revenues increased by 25% year-over-year to NT$188,626 million.
• Net income attributable to shareholders rose to NT$17,465 million, up from NT$14,176 million in 3Q21.
• Basic EPS rose to NT$4.03 from NT$3.29 year-over-year.
• EMS revenues surged 37% sequentially.

Negative

• Gross margin decreased to 20.1% from 21.4% in 2Q22.
• High customer concentration with five largest customers accounting for 45% of total revenues.

TAIPEI, Taiwan, R.O.C., Oct. 27, 2022 /PRNewswire/ -- ASE Technology Holding Co., Ltd. (TWSE: 3711, NYSE: ASX) ("We", "ASEH", or the "Company"), the leading provider of semiconductor assembly and testing services (ATM) and the provider of electronic manufacturing services (EMS), today reported its unaudited net revenues^[1] of NT$188,626 million for 3Q22, up by 25% year-over-year (or up by 31% year-over-year on pro forma basis) and up by 18% sequentially.  Net income attributable to shareholders of the parent for the quarter totaled NT$17,465 million, up from a net income attributable to shareholders of the parent of NT$14,176 million in 3Q21 (or up from a net income attributable to shareholders of the parent of NT$13,256 million in 3Q21 on pro forma basis) and up from a net income attributable to shareholders of the parent of NT$15,988 million in 2Q22.  Basic earnings per share for the quarter were NT$4.03 (or US$0.268 per ADS), compared to NT$3.29 for 3Q21 (or NT$3.07 for 3Q21 on pro forma basis) and NT$3.69 for 2Q22.  Diluted earnings per share for the quarter were NT$3.92 (or US$0.260 per ADS), compared to NT$3.20 for 3Q21 (or NT$2.99 for 3Q21 on pro forma basis) and NT$3.61 for 2Q22.

We are providing you with the unaudited pro forma financial information to assist you in your analysis of the financial aspects of our disposal of the China Sites in 4Q21.  The unaudited pro forma financial information was based on our historical financial statements and historical financial statements of our China sites, given effect to the disposal as if it had occurred for the preceding three months and nine months ended 3Q21.  For more details on our operations, please refer to "Supplemental Financial Information", "Summary of Consolidated Statement of Income Data", and "Summary of ATM Statement of Income Data."

RESULTS OF OPERATIONS

3Q22 Results Highlights – Consolidated

• Net revenues contribution from packaging operations, testing operations, EMS operations and others, each represented approximately 43%, 8%, 48% and 1%, respectively, of the total net revenues of the quarter.
• Cost of revenues was NT$150,654 million for the quarter, up from NT$126,051 million in 2Q22.
• Raw material cost totaled NT$102,158 million for the quarter, representing 54% of the total net revenues.
• Labor cost totaled NT$17,292 million for the quarter, representing 9% of the total net revenues.
• Depreciation, amortization and rental expenses totaled NT$12,811 million for the quarter.
• Gross margin decreased by 1.3 percentage points to 20.1% in 3Q22 from 21.4% in 2Q22.
• Operating margin was 12.6% in 3Q22, compared to 12.8% in 2Q22.
• In terms of non-operating items:
• Net interest expense was NT$966 million.
• Net foreign exchange loss of NT$2,818 million was primarily attributable to the appreciation of U.S. dollar against New Taiwan dollar.
• Net gain on valuation of financial assets and liabilities was NT$2,878 million.
• Net gain on equity-method investments was NT$358 million.
• Other net non-operating income of NT$480 million was primarily attributable to miscellaneous income.  Total non-operating expense for the quarter was NT$68 million.
• Income before tax was NT$23,615 million for 3Q22, compared to NT$21,136 million in 2Q22.  We recorded income tax expenses of NT$5,046 million for the quarter, compared to NT$4,479 million in 2Q22.
• In 3Q22, net income attributable to shareholders of the parent was NT$17,465 million, compared to NT$14,176 million in 3Q21 and NT$15,988 million in 2Q22.
• Our total number of shares outstanding at the end of the quarter was 4,364,218,532, including treasury stock owned by our subsidiaries in 3Q22.  Our 3Q22 basic earnings per share of NT$4.03 (or US$0.268 per ADS) were based on 4,330,471,737 weighted average numbers of shares outstanding in 3Q22.  Our 3Q22 diluted earnings per share of NT$3.92 (or US$0.260 per ADS) were based on 4,373,878,048 weighted average number of shares outstanding in 3Q22.

3Q22 Results Highlights – ATM

• Net revenues were NT$98,831 million, up by 10% year-over-year (or up by 19% year-over-year on pro forma basis) and up by 4% sequentially.
• Cost of revenues was NT$69,999 million for the quarter, up by 4% sequentially.
• Raw material cost totaled NT$28,072 million for the quarter, representing 28% of the total net revenues.
• Labor cost totaled NT$14,383 million for the quarter, representing 15% of the total net revenues.
• Depreciation, amortization and rental expenses totaled NT$11,574 million for the quarter.
• Gross margin stayed flat, which was 29.2% in both 3Q22 and 2Q22.
• Operating margin was 18.9% in both 3Q22 and 2Q22.

3Q22 Results Highlights – EMS

• Net revenues were NT$90,665 million, up by 37% sequentially.
• Cost of revenues for the quarter was NT$81,467 million, up by 37% sequentially.
• Raw material cost totaled NT$73,999 million for the quarter, representing 82% of the total net revenues.
• Labor cost totaled NT$2,799 million for the quarter, representing 3% of the total net revenues.
• Depreciation, amortization and rental expenses totaled NT$967 million for the quarter.
• Gross margin increased by 0.1 percentage points to 10.1% in 3Q22 from 10.0% in 2Q22.
• Operating margin was 5.7% in 3Q22, compared to 4.0% in 2Q22.

LIQUIDITY AND CAPITAL RESOURCES

• Capital expenditures in 3Q22 totaled US$400 million, of which US$197 million were used in packaging operations, US$134 million in testing operations, US$50 million in EMS operations and US$19 million in interconnect materials operations and others.
• Total unused credit lines amounted to NT$296,099 million as of September 30, 2022.
• Current ratio was 1.22 and net debt to equity ratio was 0.53 as of September 30, 2022.
• Total number of employees was 99,104 as of September 30, 2022, compared to 97,800 as of June 30, 2022.

Business Review

Customers

ATM Basis

• Our five largest customers together accounted for approximately 45% of our total net revenues in 3Q22, compared to 46% in 2Q22.  Two customers each accounted for more than 10% of our total net revenues in 3Q22 individually.
• Our top 10 customers contributed 59% of our total net revenues in both 3Q22 and 2Q22. 
• Our customers that are integrated device manufacturers or IDMs accounted for 33% of our total net revenues in 3Q22, compared to 30% in 2Q22. 

EMS Basis

• Our five largest customers together accounted for approximately 74% of our total net revenues in 3Q22, compared to 66% in 2Q22.  One customer accounted for more than 10% of our total net revenues in 3Q22.
• Our top 10 customers contributed 81% of our total net revenues in 3Q22, compared to 75% in 2Q22.

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 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, Vietnam, Mexico, and Tunisia 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 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 2021 Annual Report on Form 20-F filed on March 29, 2022.

Investor Relations Contact:

ir@aseglobal.com

Tel: +886.2.6636.5678

http://www.aseglobal.com

 

Supplemental Financial Information

(Unaudited)

Consolidated Operations

				Pro Forma Basis
	3Q22	2Q22	3Q21	3Q21
EBITDA (NT$ million)	38,601	35,211	32,655	30,806

ATM Operations

				Pro Forma Basis
	3Q22	2Q22	3Q21	3Q21
Net Revenues (NT$ million)	98,831	94,998	90,092	83,321
Revenue by Application
Communication	53 %	52 %	51 %	53 %
Computing	16 %	16 %	15 %	15 %
Automotive, Consumer & Others	31 %	32 %	34 %	32 %
Revenue by Type
Bumping, Flip Chip, WLP & SiP	42 %	43 %	36 %	39 %
Wirebonding	34 %	35 %	39 %	37 %
Others	7 %	6 %	8 %	7 %
Testing	15 %	15 %	15 %	15 %
Material	2 %	1 %	2 %	2 %
Capacity & EBITDA
CapEx (US$ million)*	348	461	407	364
EBITDA (NT$ million)	31,657	30,940	28,588	26,739
Number of Wirebonders	25,887	25,876	29,943	25,723
Number of Testers	5,406	5,194	6,149	4,652

EMS Operations

	3Q22	2Q22	3Q21
Net Revenues (NT$ million)	90,665	66,218	61,127
Revenue by Application
Communication	37 %	35 %	38 %
Computing	9 %	13 %	10 %
Consumer	36 %	28 %	33 %
Industrial	11 %	15 %	12 %
Automotive	6 %	8 %	5 %
Others	1 %	1 %	2 %
Capacity
CapEx (US$ million)*	50	53	60

*Capital expenditure excludes building construction costs.

 

ASE Technology Holding Co., Ltd.

Summary of Consolidated Statement of Income Data

(In NT$ millions, except per share data)

(Unaudited)

	For the three months ended								For the nine months ended
							Pro Forma Basis						Pro Forma Basis
	Sep. 30 2022		Jun. 30 2022		Sep. 30 2021		Sep. 30 2021		Sep. 30 2022		Sep. 30 2021		Sep. 30 2021
Net revenues
Packaging	80,541		78,394		73,996		68,287		227,318		197,178		181,548
Testing	14,942		13,760		13,416		12,353		41,285		36,222		33,212
EMS	90,660		66,213		61,116		61,116		218,036		157,947		157,947
Others	2,483		2,072		2,137		2,137		6,817		5,714		5,714
Total net revenues	188,626		160,439		150,665		143,893		493,456		397,061		378,421
Cost of revenues	(150,654)		(126,051)		(119,881)		(114,642)		(392,625)		(319,586)		(304,832)
Gross profit	37,972		34,388		30,784		29,251		100,831		77,475		73,589
Operating expenses
Research and development	(6,262)		(5,795)		(5,495)		(5,272)		(17,419)		(15,340)		(14,699)
Selling, general and administrative	(8,027)		(7,987)		(6,863)		(6,516)		(23,010)		(19,626)		(18,628)
Total operating expenses	(14,289)		(13,782)		(12,358)		(11,788)		(40,429)		(34,966)		(33,327)
Operating income	23,683		20,606		18,426		17,463		60,402		42,509		40,262
Net non-operating income and expenses
Interest expense - net	(966)		(702)		(562)		(556)		(2,240)		(1,703)		(1,672)
Foreign exchange gain (loss)	(2,818)		(1,301)		66		55		(5,223)		899		871
Gain (loss) on valuation of financial assets and liabilities	2,878		1,543		(349)		(359)		5,827		(1,008)		(1,057)
Gain on equity-method investments	358		486		414		414		1,043		782		782
Others	480		504		479		412		1,605		1,520		1,308
Total non-operating income  and expenses	(68)		530		48		(34)		1,012		490		232
Income before tax	23,615		21,136		18,474		17,429		61,414		42,999		40,494
Income tax expense	(5,046)		(4,479)		(3,630)		(3,505)		(12,803)		(8,729)		(8,440)
Income from operations and before non-controlling interests	18,569		16,657		14,844		13,924		48,611		34,270		32,054
Non-controlling interests	(1,104)		(669)		(668)		(668)		(2,251)		(1,278)		(1,278)
Net income attributable to shareholders of the parent	17,465		15,988		14,176		13,256		46,360		32,992		30,776
Per share data:
Earnings per share
– Basic	NT$4.03		NT$3.69		NT$3.29		NT$3.07		NT$10.74		NT$7.66		NT$7.14
– Diluted	NT$3.92		NT$3.61		NT$3.20		NT$2.99		NT$10.34		NT$7.43		NT$6.92
Earnings per equivalent ADS
– Basic	US$0.268		US$0.253		US$0.236		US$0.221		US$0.739		US$0.546		US$0.509
– Diluted	US$0.260		US$0.247		US$0.230		US$0.215		US$0.711		US$0.530		US$0.494
Number of weighted average shares used in diluted EPS calculation (in thousands)	4,373,878		4,375,107		4,370,715		4,370,715		4,368,634		4,370,312		4,370,312
FX (NTD/USD)	30.10		29.26		27.79		27.79		29.07		28.04		28.04

 

ASE Technology Holding Co., Ltd.

Summary of ATM Statement of Income Data

 (In NT$ millions)

(Unaudited)

	For the three months ended								For the nine months ended
							Pro Forma Basis						Pro Forma Basis
	Sep. 30 2022		Jun. 30 2022		Sep. 30 2021		Sep. 30 2021		Sep. 30 2022		Sep. 30 2021		Sep. 30 2021
Net revenues
Packaging	82,090		79,894		75,221		69,512		231,905		202,702		187,072
Testing	14,941		13,760		13,416		12,354		41,284		36,224		33,214
Direct Material	1,765		1,288		1,429		1,429		4,532		3,845		3,845
Others	35		56		26		26		133		76		76
Total net revenues	98,831		94,998		90,092		83,321		277,854		242,847		224,207
Cost of revenues	(69,999)		(67,230)		(65,378)		(60,140)		(198,154)		(179,916)		(165,162)
Gross profit	28,832		27,768		24,714		23,181		79,700		62,931		59,045
Operating expenses
Research and development	(4,901)		(4,455)		(4,254)		(4,032)		(13,491)		(11,780)		(11,138)
Selling, general and administrative	(5,268)		(5,318)		(4,829)		(4,482)		(15,540)		(13,775)		(12,777)
Total operating expenses	(10,169)		(9,773)		(9,083)		(8,514)		(29,031)		(25,555)		(23,915)
Operating income	18,663		17,995		15,631		14,667		50,669		37,376		35,130

 

ASE Technology Holding Co., Ltd.

Summary of EMS Statement of Income Data

 (In NT$ millions)

(Unaudited)

	For the three months ended						For the nine months ended
	Sep. 30 2022		Jun. 30 2022		Sep. 30 2021		Sep. 30 2022		Sep. 30 2021
Net revenues	90,665		66,218		61,127		218,049		157,974
Cost of revenues	(81,467)		(59,568)		(55,244)		(196,821)		(143,604)
Gross profit	9,198		6,650		5,883		21,228		14,370
Operating expenses
Research and development	(1,392)		(1,380)		(1,270)		(4,021)		(3,641)
Selling, general and administrative	(2,676)		(2,603)		(1,955)		(7,210)		(5,622)
Total operating expenses	(4,068)		(3,983)		(3,225)		(11,231)		(9,263)
Operating income	5,130		2,667		2,658		9,997		5,107

 

ASE Technology Holding Co., Ltd.

Summary of Consolidated Balance Sheet Data

(In NT$ millions)

(Unaudited)

			As of Sep. 30, 2022			As of Jun. 30, 2022
Current assets
Cash and cash equivalents			52,358			72,846
Financial assets – current			9,667			6,136
Notes and accounts receivable			140,178			116,617
Inventories			101,287			94,661
Others			29,239			28,503
Total current assets			332,729			318,763
Financial assets – non-current & Investments – equity  method			22,926			22,356
Property, plant and equipment			264,508			254,784
Right-of-use assets			11,822			10,853
Intangible assets			73,590			74,300
Others			32,254			32,023
Total assets			737,829			713,079
Current liabilities
Short-term borrowings			78,056			60,722
Current portion of bonds payable & Current portion of  long-term borrowings			8,157			11,835
Notes and accounts payable			104,286			86,534
Others			83,248			111,136
Total current liabilities			273,747			270,227
Bonds payable			40,534			40,923
Long-term borrowings[2]			89,273			97,367
Other liabilities			28,625			26,251
Total liabilities			432,179			434,768
Equity attributable to shareholders of the parent			288,361			263,039
Non-controlling interests			17,289			15,272
Total liabilities & shareholders' equity			737,829			713,079
Current Ratio			1.22			1.18
Net Debt to Equity Ratio			0.53			0.50

 

ASE Technology Holding Co., Ltd.

Summary of Consolidated Statement of Cash Flow Data

(In NT$ millions)

(Unaudited)

		For the three months ended										For the nine months ended
		Sep. 30		Jun. 30			Sep. 30						Sep. 30				Sep. 30
		2022		2022			2021						2022				2021
Cash Flows from Operating Activities
Profit before income tax		23,615		21,136				18,474						61,414				42,999
Depreciation & amortization		13,947		13,749				13,864						41,199				40,454
Other operating activities items		(18,944)		(19,858)				(17,505)						(41,788)				(34,638)
Net cash generated from operating activities		18,618		15,027				14,833						60,825				48,815
Cash Flows from Investing Activities
Net payments for property, plant and equipment		(17,219)		(17,292)				(20,294)						(51,693)				(52,787)
Other investment activities items		288		(245)				(139)						(710)				(1,603)
Net cash used in investing activities		(16,931)		(17,537)				(20,433)						(52,403)				(54,390)
Cash Flows from Financing Activities
Total net proceeds from (repayment of) borrowings and bonds		1,111		(8,980)				25,319						(13,179)				28,279
Dividends paid		(29,991)		-				(18,083)						(29,991)				(18,083)
Other financing activities items		(228)		(893)				(854)						(1,390)				(263)
Net cash generated from (used in) financing activities		(29,108)		(9,873)				6,382						(44,560)				9,933
Foreign currency exchange effect		6,933		803				(350)						12,423				(2,477)
Net increase (decrease) in cash and cash equivalents		(20,488)		(11,580)				432						(23,715)				1,881
Cash and cash equivalents at the beginning of period		72,846		84,426				52,987						76,073				51,538
Cash and cash equivalents at the  end of period		52,358		72,846				53,419						52,358				53,419

[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 year-end audited consolidated financial statements, and may vary materially from the year-end 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 year-end 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] Long-term borrowings include long-term loans and bills payable.

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SOURCE ASE Technology Holding Co., Ltd.

FAQ

What were ASE Technology's earnings in 3Q22 on the ASX?

ASE Technology reported a net income of NT$17,465 million and basic earnings per share of NT$4.03.

How much did ASE Technology's revenues increase year-over-year in 3Q22?

ASE Technology's revenues increased by 25% year-over-year to NT$188,626 million.

What were the earnings per share for ASE Technology in 3Q22?

Basic earnings per share for ASE Technology in 3Q22 were NT$4.03.

What percentage of ASE Technology's revenues came from its top customers in 3Q22?

The five largest customers accounted for approximately 45% of ASE Technology's total revenues in 3Q22.