ASE Technology Holding Co., Ltd. Reports Its Unaudited Consolidated Financial Results for the First Quarter of 2024

Rhea-AI Summary

ASE Technology Holding Co., reported its unaudited consolidated financial results for the first quarter of 2024, with net revenues of NT$132,803 million, up by 1.5% year-over-year. The net income attributable to shareholders of the parent totaled NT$5,682 million for the quarter. The company's basic earnings per share for the quarter were NT$1.32, down from NT$1.36 for the same period last year.

Positive

• Net revenues increased by 1.5% year-over-year to NT$132,803 million.
• Net income attributable to shareholders for the quarter was NT$5,682 million.
• Basic earnings per share for the quarter were NT$1.32, a decrease from NT$1.36 in the first quarter of 2023.
• Total number of shares outstanding at the end of the quarter was 4,392,550,237.
• Gross margin decreased to 15.7% in 1Q24 from 16.0% in 4Q23.
• Operating margin was 5.7% in 1Q24, compared to 7.4% in 4Q23.
• Net interest expense was NT$1,107 million for the quarter.
• Net foreign exchange loss was NT$3,219 million due to the appreciation of the U.S. dollar.
• Income before tax was NT$7,860 million, down from NT$12,367 million in the previous quarter.
• Total non-operating income for the quarter was NT$335 million.
• Net revenues for ATM operations were NT$73,908 million, up by 0.8% year-over-year.
• Net revenues for EMS operations were NT$59,365 million, up by 2.8% year-over-year.
• Gross margin for EMS operations increased to 9.3% in 1Q24 from 8.4% in 4Q23.

Negative

• Operating margin decreased from 7.4% in 4Q23 to 5.7% in 1Q24.
• Net income attributable to shareholders decreased from NT$5,817 million in 1Q23 to NT$5,682 million in 1Q24.
• Basic earnings per share decreased from NT$1.36 in 1Q23 to NT$1.32 in 1Q24.
• The company recorded a net foreign exchange loss of NT$3,219 million in 1Q24.
• Income before tax decreased from NT$12,367 million in 4Q23 to NT$7,860 million in 1Q24.
• Net income attributable to shareholders decreased from NT$9,392 million in 4Q23 to NT$5,682 million in 1Q24.
• Gross margin for ATM operations decreased from 23.4% in 4Q23 to 21.0% in 1Q24.
• Operating margin for ATM operations decreased from 11.2% in 4Q23 to 8.2% in 1Q24.
• Net revenues for EMS operations decreased by 25.0% sequentially in 1Q24.

Insights

Financial Analyst

ASE Technology Holding's recent report delineating a marginal year-over-year increase in net revenue indicates resilience in a cyclic industry known for volatility. However, the noticeable quarterly descent is a potential red flag, suggesting a cooling period or operational challenges. This juxtaposition of trends is crucial, as it directly correlates with investor expectations of growth and stability.

Analyzing the raw material costs maintaining a 50% hold on net revenues highlights not only supply chain efficiency but also the criticality of commodity price fluctuations influencing profitability. Investors should monitor these costs closely, as they can significantly sway future margins.

The reported decline in net income and earnings per share (EPS) is a concern, reflecting either increased competition, pricing pressures, or possible internal inefficiencies. Long-term investors might seek solace in the company's operational diversification across packaging and EMS, which can potentially buffer against sector-specific downturns.

Corporate Strategy Analyst

ASE's strategy of maintaining a diversified customer base, evident from the balanced revenue contribution across its top customers, is a defensive maneuver against market concentration risks. Nevertheless, the subtle shift in the percentage contributions of its largest customers indicates a dynamic competitive landscape, potentially hinting at changes in market share or shifts in strategic partnerships.

Further, the company's capital expenditure, particularly in packaging operations, signals a commitment to maintaining technological competitiveness. However, investors must weigh this against the firm's current ratio and net debt to equity figures to gauge liquidity and leverage risks appropriately.

Lastly, the slight reduction in the workforce might be perceived as cost optimization, but it could also raise questions about capacity utilization and long-term growth capabilities. Savvy investors will likely scrutinize subsequent quarters for trends in operational efficiency and workforce metrics.

Market Research Analyst

In terms of market dynamics, ASE's operational results provide a window into the broader semiconductor assembly and testing service industry's health. The reported gross and operating margin declines, specifically within the ATM segment, may suggest pricing pressures or increased costs that could be industry-wide concerns.

Moreover, the foreign exchange loss pinpoints the vulnerabilities of global operations to currency volatility, an aspect often underestimated by the retail investor. The influence of these forex movements can be profound, directly impacting net income and hence, must be considered when extrapolating future company performance.

With capital expenditures notably allocated towards packaging and testing operations, ASE seems poised to capitalize on anticipated industry growth trends, such as the ongoing demand for advanced packaging solutions driven by burgeoning sectors like 5G and AI. This strategic positioning could bode well for long-term revenue streams.

TAIPEI, April 25, 2024 /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$132,803 million for 1Q24, up by 1.5% year-over-year and down by 17.3% sequentially. Net income attributable to shareholders of the parent for the quarter totaled NT$5,682 million, down from NT$5,817 million in 1Q23 and down from NT$9,392 million in 4Q23.  Basic earnings per share for the quarter were NT$1.32 (or US$0.084 per ADS), compared to NT$1.36 for 1Q23 and NT$2.18 for 4Q23.  Diluted earnings per share for the quarter were NT$1.28 (or US$0.082 per ADS), compared to NT$1.30 for 1Q23 and NT$2.13 for 4Q23.

RESULTS OF OPERATIONS

1Q24 Results Highlights – Consolidated

• Net revenues from packaging operations, testing operations, EMS operations, and others represented approximately 45%, 9%, 45%, and 1% of the total net revenues for the quarter, respectively.
• Cost of revenues was NT$111,935 million for the quarter, down from NT$134,820 million in 4Q23.
  • Raw material cost totaled NT$66,845 million for the quarter, representing 50% of the total net revenues.
  • Labor cost totaled NT$15,378 million for the quarter, representing 12% of the total net revenues.
  • Depreciation, amortization and rental expenses totaled NT$13,211 million for the quarter.
• Gross margin decreased by 0.3 percentage points to 15.7% in 1Q24 from 16.0% in 4Q23.
• Operating margin was 5.7% in 1Q24, compared to 7.4% in 4Q23.
• In terms of non-operating items:
  • Net interest expense was NT$1,107 million.
  • Net foreign exchange loss was NT$3,219 million, primarily attributable to the appreciation of the U.S. dollar against the New Taiwan dollar.
  • Net gain on valuation of financial assets and liabilities was NT$4,098 million.
  • Net gain on equity-method investments was NT$57 million.
  • Other net non-operating income was NT$506 million, primarily attributable to miscellaneous income.

          Total non-operating income for the quarter was NT$335 million.

• Income before tax was NT$7,860 million in 1Q24, compared to NT$12,367 million in 4Q23. We recorded income tax expenses of NT$1,904 million for the quarter, compared to NT$2,461 million in 4Q23.
• Net income attributable to shareholders of the parent was NT$5,682 million in 1Q24, compared to NT$5,817 million in 1Q23 and NT$9,392 million in 4Q23.
• Our total number of shares outstanding at the end of the quarter was 4,392,550,237, including treasury stock owned by our subsidiaries in 1Q24. Our 1Q24 basic earnings per share of NT$1.32 (or US$0.084 per ADS) were based on 4,312,488,924 weighted average numbers of shares outstanding in 1Q24.  Our 1Q24 diluted earnings per share of NT$1.28 (or US$0.082 per ADS) were based on 4,368,340,298 weighted average number of shares outstanding in 1Q24.

1Q24 Results Highlights – ATM

• Net revenues were NT$73,908 million for the quarter, up by 0.8% year-over-year and down by 9.9% sequentially.
• Cost of revenues was NT$58,351 million for the quarter, remained stable year-over-year and down by 7% sequentially.
  • Raw material cost totaled NT$20,120 million for the quarter, representing 27% of the total net revenues.
  • Labor cost totaled NT$12,245 million for the quarter, representing 17% of the total net revenues.
  • Depreciation, amortization and rental expenses totaled NT$11,780 million for the quarter.
• Gross margin decreased by 2.4 percentage points to 21.0% in 1Q24 from 23.4% in 4Q23.
• Operating margin was 8.2% in 1Q24, compared to 11.2% in 4Q23.

1Q24 Results Highlights – EMS

• Net revenues were NT$59,365 million, up by 2.8% year-over-year and down by 25.0% sequentially.
• Cost of revenues for the quarter was NT$53,866 million, up by 1% year-over-year and down by 26% sequentially.
  • Raw material cost totaled NT$46,662 million for the quarter, representing 79% of the total net revenues.
  • Labor cost totaled NT$3,009 million for the quarter, representing 5% of the total net revenues.
  • Depreciation, amortization and rental expenses totaled NT$1,171 million for the quarter.
• Gross margin increased by 0.9 percentage points to 9.3% in 1Q24 from 8.4% in 4Q23.
• Operating margin was 2.8% in 1Q24, compared to 3.5% in 4Q23.

LIQUIdiTY AND CAPITAL RESOURCES

• Capital expenditures in 1Q24 totaled US$228 million, of which US$109 million was used in packaging operations, US$97 million in testing operations, US$21 million in EMS operations and US$1  million in interconnect materials operations and others.
• Total unused credit lines amounted to NT$393,886 million as of March 31, 2024.
• Current ratio was 1.19 and net debt to equity ratio was 0.36 as of March 31, 2024.
• Total number of employees was 91,568 as of March 31, 2024, compared to 92,894 as of December 31, 2023.

Business Review

Customers
ATM Basis

• Our five largest customers together accounted for approximately 46% of our total net revenues in 1Q24, compared to 44% in 4Q23.  Two customers each accounted for more than 10% of our total net revenues in 1Q24 individually.
• Our top 10 customers contributed 61% of our total net revenues in 1Q24, compared to 58% in 4Q23.
• Our customers that are integrated device manufacturers or IDMs accounted for 30% of our total net revenues in both 1Q24 and 4Q23. 

EMS Basis

• Our five largest customers together accounted for approximately 67% of our total net revenues in 1Q24, compared to 72% in 4Q23. One customer accounted for more than 10% of our total net revenues in 1Q24.
• Our top 10 customers contributed 75% of our total net revenues in 1Q24, compared to 79% in 4Q23.

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. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. 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.  The announced results of the first quarter of 2024 are preliminary and subject to audit adjustments. 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 2023 Annual Report on Form 20-F filed on April 3, 2024.

Supplemental Financial Information
(Unaudited)

Consolidated Operations

	1Q24	4Q23	1Q23
EBITDA (NT$ million)	23,974	28,606	23,765

ATM Operations

	1Q24	4Q23	1Q23
Net Revenues (NT$ million)	73,908	82,004	73,319
Revenues by Application
Communication	52 %	53 %	50 %
Computing	18 %	17 %	17 %
Automotive, Consumer & Others	30 %	30 %	33 %
Revenues by Type
Bumping, Flip Chip, WLP & SiP	43 %	44 %	41 %
Wirebonding	30 %	30 %	34 %
Others	9 %	8 %	8 %
Testing	16 %	16 %	16 %
Material	2 %	2 %	1 %
Capacity & EBITDA
CapEx (US$ million)*	206	213	197
EBITDA (NT$ million)	20,422	23,787	20,552
Number of Wirebonders	25,406	25,860	25,799
Number of Testers	5,611	5,556	5,447

EMS Operations

	1Q24	4Q23	1Q23
Net Revenues (NT$ million)	59,365	79,182	57,733
Revenues by Application
Communication	34 %	40 %	35 %
Computing	12 %	11 %	8 %
Consumer	27 %	28 %	29 %
Industrial	12 %	11 %	17 %
Automotive	12 %	8 %	9 %
Others	3 %	2 %	2 %
Capacity
CapEx (US$ million)*	21	21	32

* Capital expenditure excludes building construction costs.

 

ASE Technology Holding Co., Ltd.
Summary of Consolidated Statement of Income Data
(In NT$ million, except per share data)
(Unaudited)

	For the three months ended
	Mar. 31 2024		Dec. 31 2023		Mar. 31 2023
Net revenues
Packaging	59,458		66,221		60,029
Testing	12,102		13,363		11,407
EMS	59,326		79,155		57,731
Others	1,917		1,842		1,724
Total net revenues	132,803		160,581		130,891
Cost of revenues	(111,935)		(134,820)		(111,552)
Gross profit	20,868		25,761		19,339
Operating expenses
Research and development	(6,609)		(6,950)		(5,572)
Selling, general and administrative	(6,734)		(6,996)		(6,072)
Total operating expenses	(13,343)		(13,946)		(11,644)
Operating income	7,525		11,815		7,695
Net non-operating income and expenses
Interest expense - net	(1,107)		(1,302)		(1,076)
Foreign exchange gain (loss)	(3,219)		3,731		545
Gain (loss) on valuation of financial assets and liabilities	4,098		(2,977)		103
Gain (loss) on equity-method investments - net	57		155		(12)
Others	506		945		615
Total non-operating income and expenses	335		552		175
Income before tax	7,860		12,367		7,870
Income tax expense	(1,904)		(2,461)		(1,777)
Income from operations and before non-controlling interests	5,956		9,906		6,093
Non-controlling interests	(274)		(514)		(276)
Net income attributable to shareholders of the parent	5,682		9,392		5,817
Per share data:
Earnings per share
– Basic	NT$1.32		NT$2.18		NT$1.36
– Diluted	NT$1.28		NT$2.13		NT$1.30
Earnings per equivalent ADS
– Basic	US$0.084		US$0.137		US$0.089
– Diluted	US$0.082		US$0.133		US$0.086
Number of weighted average shares used in diluted EPS calculation ( in thousand shares)	4,368,340		4,351,271		4,336,965
FX (NTD/USD)	31.30		31.92		30.40

 

ASE Technology Holding Co., Ltd.
Summary of ATM Statement of Income Data
 (In NT$ million) 
(Unaudited)

	For the three months ended
	Mar. 31 2024		Dec. 31 2023		Mar. 31 2023
Net revenues:
Packaging	60,388		67,378		60,770
Testing	12,102		13,363		11,407
Direct Material	1,338		1,205		1,106
Others	80		58		36
Total net revenues	73,908		82,004		73,319
Cost of revenues	(58,351)		(62,786)		(58,570)
Gross profit	15,557		19,218		14,749
Operating expenses:
Research and development	(5,135)		(5,425)		(4,269)
Selling, general and administrative	(4,345)		(4,581)		(4,071)
Total operating expenses	(9,480)		(10,006)		(8,340)
Operating income	6,077		9,212		6,409

 

ASE Technology Holding Co., Ltd.
Summary of EMS Statement of Income Data
 (In NT$ million) 
(Unaudited)

	For the three months ended
	Mar. 31 2024		Dec. 31 2023		Mar. 31 2023
Net revenues	59,365		79,182		57,733
Cost of revenues	(53,866)		(72,496)		(53,166)
Gross profit	5,499		6,686		4,567
Operating expenses:
Research and development	(1,533)		(1,567)		(1,324)
Selling, general and administrative	(2,309)		(2,320)		(1,918)
Total operating expenses	(3,842)		(3,887)		(3,242)
Operating income	1,657		2,799		1,325

 

ASE Technology Holding Co., Ltd.
Summary of Consolidated Balance Sheet Data
(In NT$ million)
(Unaudited)

			As of Mar. 31, 2024			As of Dec. 31, 2023
Current assets
Cash and cash equivalents			75,105			67,284
Financial assets – current			8,410			4,683
Trade receivables			97,264			99,529
Inventories			63,259			63,275
Others			28,964			26,576
Total current assets			273,002			261,347
Financial assets – non-current & Investments – equity -method			30,776			29,698
Property, plant and equipment			265,592			264,812
Right-of-use assets			11,534			11,442
Intangible assets			68,986			69,569
Others			31,580			29,707
Total assets			681,470			666,575
Current liabilities
Short-term borrowings[2]			56,863			53,042
Current portion of bonds payable & Current portion of  long-term borrowings			14,075			28,616
Trade payables			66,454			70,329
Others			91,651			70,361
Total current liabilities			229,043			222,348
Bonds payable			31,618			20,489
Long-term borrowings			84,589			81,365
Other liabilities			24,051			24,263
Total liabilities			369,301			348,465
Equity attributable to shareholders of the parent			290,996			297,826
Non-controlling interests			21,173			20,284
Total liabilities & shareholders' equity			681,470			666,575
Current ratio			1.19			1.18
Net debt to equity ratio			0.36			0.38

 

ASE Technology Holding Co., Ltd.
Summary of Consolidated Statement of Cash Flow Data
(In NT$ million)
(Unaudited)

		For the three months ended
		Mar. 31		Dec. 31		Mar. 31
		2024		2023		2023
Cash Flows from Operating Activities:
Income before tax		7,860		12,367		7,870
Depreciation & amortization		14,586		14,607		14,439
Other operating activities items		(5,752)		19,854		8,449
Net cash generated from operating activities		16,694		46,828		30,758
Cash Flows from Investing Activities:
Net payments for property, plant and equipment		(12,513)		(11,859)		(15,206)
Other investment activities items		(2,995)		582		415
Net cash used in investing activities		(15,508)		(11,277)		(14,791)
Cash Flows from Financing Activities:
Net repayment of loans		(139)		(24,441)		(11,621)
Other financing activities items		(33)		534		116
Net cash used in financing activities		(172)		(23,907)		(11,505)
Foreign currency exchange effect		6,807		(7,433)		(446)
Net increase in cash and cash equivalents		7,821		4,211		4,016
Cash and cash equivalents at the beginning of period		67,284		62,812		58,040
Cash and cash equivalents at the end of period		75,105		67,023		62,056
Cash and cash equivalents in the consolidated balance sheet		75,105		67,284		62,056
Cash and cash equivalents included in disposal groups held for sale		-		(261)		-

 

[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] Short-term borrowings include short-term loans and bills payable.

 

Investor Relations Contact
        ir@aseglobal.com
        Tel: +886.2.6636.5678
        https://www.aseglobal.com

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SOURCE ASE Technology Holding Co., Ltd.

FAQ

What were ASE Technology Holding Co., 's net revenues for the first quarter of 2024?

ASE Technology Holding Co., reported net revenues of NT$132,803 million for the first quarter of 2024.

What was the net income attributable to shareholders for ASE Technology Holding Co., in the first quarter of 2024?

The net income attributable to shareholders of ASE Technology Holding Co., for the first quarter of 2024 was NT$5,682 million.

What was the basic earnings per share for ASE Technology Holding Co., in the first quarter of 2024?

The basic earnings per share for ASE Technology Holding Co., in the first quarter of 2024 was NT$1.32.

How did ASE Technology Holding Co., 's gross margin change from the fourth quarter of 2023 to the first quarter of 2024?

ASE Technology Holding Co., 's gross margin decreased from 16.0% in 4Q23 to 15.7% in 1Q24.

What was the net interest expense for ASE Technology Holding Co., in the first quarter of 2024?

The net interest expense for ASE Technology Holding Co., in the first quarter of 2024 was NT$1,107 million.

What was the total number of shares outstanding for ASE Technology Holding Co., at the end of the first quarter of 2024?

The total number of shares outstanding for ASE Technology Holding Co., at the end of the first quarter of 2024 was 4,392,550,237.

How did ASE Technology Holding Co., 's net revenues for ATM operations change from the first quarter of 2023 to the first quarter of 2024?

ASE Technology Holding Co., 's net revenues for ATM operations were NT$73,908 million in the first quarter of 2024, up by 0.8% year-over-year.

What was the gross margin for EMS operations for ASE Technology Holding Co., in the first quarter of 2024?

The gross margin for EMS operations for ASE Technology Holding Co., in the first quarter of 2024 was 9.3%.