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

Rhea-AI Summary

ASE Technology Holding Co., Ltd. reported unaudited net revenues of NT$144,391 million for 1Q22, a 21% increase year-over-year but a 17% decrease sequentially. Net income attributable to shareholders was NT$12,907 million, up from NT$8,477 million in 1Q21 but down from NT$30,916 million in 4Q21, with basic earnings per share at NT$3.01. Gross margin improved to 19.7%, while operating margin slightly decreased to 11.2%. Customer concentration increased, with the top five customers accounting for 47% of revenues.

Positive

• Net revenues rose 21% year-over-year to NT$144,391 million.
• Net income attributable to shareholders increased from NT$8,477 million in 1Q21 to NT$12,907 million in 1Q22.
• Basic earnings per share improved to NT$3.01 compared to NT$1.97 in 1Q21.
• Gross margin increased to 19.7% from 19.0% in 4Q21.

Negative

• Net income decreased significantly from NT$30,916 million in 4Q21 to NT$12,907 million in 1Q22.
• Net revenues declined 17% sequentially.
• Operating margin dropped from 11.3% in 4Q21 to 11.2% in 1Q22.
• Significant reliance on a small number of customers persisted, with top five accounting for 47% of revenues.

TAIPEI, Taiwan, R.O.C., April 28, 2022 /PRNewswire/ -- ASE Technology Holding Co., Ltd. (TAIEX: 3711, NYSE: ASX) ("We", "ASEH", or the "Company"), the leading provider of semiconductor assembly and test services (ATM) and electronic manufacturing services (EMS), today reported its unaudited net revenues^[1] of NT$144,391 million for 1Q22, up by 21% year-over-year and down by 17% sequentially (or up by 27% year-over-year and down by 13% sequentially on pro forma basis). Net income attributable to shareholders of the parent for the quarter totaled NT$12,907 million, up from a net income attributable to shareholders of the parent of NT$8,477 million in 1Q21 and down from a net income attributable to shareholders of the parent of NT$30,916 million in 4Q21 (or up from a net income attributable to shareholders of the parent of NT$7,981 million in 1Q21 and down from a net income attributable to shareholders of the parent of NT$14,459 million in 4Q21 on pro forma basis).  Basic earnings per share for the quarter were NT$3.01 (or US$0.216 per ADS), compared to NT$1.97 for 1Q21 and NT$7.20 for 4Q21 (or NT$1.85 for 1Q21 and NT$3.37 for 4Q21 on pro forma basis).  Diluted earnings per share for the quarter were NT$2.92 (or US$0.210 per ADS), compared to NT$1.92 for 1Q21 and NT$6.99 for 4Q21 (or NT$1.80 for 1Q21 and NT$3.21 for 4Q21 on pro forma basis).

We are providing the unaudited pro forma financial information to aid 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 China sites' historical financial statements, given effect to the disposal as if it had occurred for the preceding quarters of 1Q21 and 4Q21. For more details on our operations, please refer to "Summary of Consolidated Statement of Income Data" and "Summary of Consolidated Statement of Income Data – ATM."

RESULTS OF OPERATIONS

1Q22 Results Highlights – Consolidated

• Net revenues contribution from packaging operations, testing operations, EMS operations and others, each represented approximately 47%, 9%, 42% and 2%, respectively, of total net revenues for the quarter.
• Cost of revenues was NT$115,920 million for the quarter, down from NT$140,042 million in 4Q21.
• Raw material cost totaled NT$72,117 million for the quarter, representing 50% of total net revenues.
• Labor cost totaled NT$16,148 million for the quarter, representing 11% of total net revenues.
• Depreciation, amortization and rental expenses totaled NT$12,318 million for the quarter.
• Gross margin increased 0.7 percentage points to 19.7% in 1Q22 from 19.0% in 4Q21.
• Operating margin was 11.2% in 1Q22, compared to 11.3% in 4Q21.
• In terms of non-operating items:
• Net interest expense was NT$432 million.
• Net foreign exchange loss of NT$1,104 million was primarily attributable to the appreciation of U.S. dollar against New Taiwan dollar.
• Gain on valuation of financial assets and liabilities was NT$1,406 million.
• Net gain on equity-method investments was NT$199 million.
• Other net non-operating income of NT$481 million was primarily attributable to miscellaneous income.  Total non-operating income for the quarter was NT$550 million.
• Income before tax was NT$16,663 million for 1Q22, compared to NT$37,336 million in 4Q21.  We recorded income tax expenses of NT$3,278 million for the quarter, compared to NT$5,592 million in 4Q21.
• In 1Q22, net income attributable to shareholders of the parent was NT$12,907 million, compared to NT$8,477 million in 1Q21 and NT$30,916 million in 4Q21.
• Our total number of shares outstanding at the end of the quarter was 4,357,508,832, including treasury stock owned by our subsidiaries in 1Q22.  Our 1Q22 basic earnings per share of NT$3.01 (or US$0.216 per ADS) were based on 4,289,978,359 weighted average numbers of shares outstanding in 1Q22.  Our 1Q22 diluted earnings per share of NT$2.92 (or US$0.210 per ADS) were based on 4,341,041,922 weighted average number of shares outstanding in 1Q22.

1Q22 Results Highlights – ATM

• Net revenues were NT$84,025 million, down by 9% sequentially or down by 1% on pro forma basis.
• Cost of revenues was NT$60,924 million for the quarter, down by 8% sequentially.
• Raw material cost totaled NT$22,913 million for the quarter, representing 27% of total net revenues.
• Labor cost totaled NT$13,555 million for the quarter, representing 16% of total net revenues.
• Depreciation, amortization and rental expenses totaled NT$11,146 million for the quarter.
• Gross margin decreased 0.5 percentage point to 27.5% in 1Q22 from 28.0% in 4Q21.
• Operating margin was 16.7% in 1Q22, compared to 17.5% in 4Q21.

1Q22 Results Highlights – EMS

• Net revenues were NT$61,166 million, down by 25% sequentially.
• Cost of revenues for the quarter was NT$55,786 million, down by 25% sequentially.
• Raw material cost totaled NT$49,100 million for the quarter, representing 80% of total net revenues.
• Labor cost totaled NT$2,482 million for the quarter, representing 4% of total net revenues.
• Depreciation, amortization and rental expenses totaled NT$904 million for the quarter.
• Gross margin increased 0.1 percentage points to 8.8% in 1Q22 from 8.7% in 4Q21.
• Operating margin was 3.6% in 1Q22, compared to 4.4% in 4Q21.

LIQUIDITY AND CAPITAL RESOURCES

• Capital expenditures in 1Q22 totaled US$443 million, of which US$311 million were used in packaging operations, US$96 million in testing operations, US$26 million in EMS operations and US$10 million in interconnect materials operations and others.
• Total unused credit lines amounted to NT$285,878 million as of March 31, 2022.
• Current ratio was 1.22 and net debt to equity ratio was 0.52 as of March 31, 2022.
• Total number of employees was 95,105 as of March 31, 2022, compared to 95,727 as of December 31, 2021.

BUSINESS REVIEW

Customers

ATM BASIS

• Our five largest customers together accounted for approximately 47% of our total net revenues in 1Q22, compared to 45% in 4Q21.  Two customers each accounted for more than 10% of our total net revenues in 1Q22 individually.
• Our top 10 customers contributed 59% of our total net revenues in 1Q22, compared to 56% in 4Q21. 
• Our customers that are integrated device manufacturers or IDMs accounted for 29% of our total net revenues in 1Q22, compared to 31% in 4Q21. 

EMS BASIS

• Our five largest customers together accounted for approximately 70% of our total net revenues in 1Q22, compared to 77% in 4Q21.  One customer accounted for more than 10% of our total net revenues in 1Q22.
• Our top 10 customers contributed 79% of our total net revenues in 1Q22, compared to 84% in 4Q21.

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, Vietnam 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 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.

Supplemental Financial Information
(Unaudited)

Consolidated Operations

	Legal Entity Basis			Pro forma Basis
	1Q22	4Q21	1Q21	4Q21	1Q21
EBITDA (NT$ Millions)	30,661	51,938	24,867	32,624	23,487

ATM Operations

	Legal Entity Basis			Pro forma Basis
	1Q22	4Q21	1Q21	4Q21	1Q21
Net Revenues (NT$ Millions)	84,025	91,958	73,767	85,180	68,139
Revenue by Application
Communication	52%	50%	50%	53%	53%
Computing	16%	16%	14%	16%	14%
Automotive, Consumer & Others	32%	34%	36%	31%	33%
Revenue by Type
Bumping, Flip Chip, WLP & SiP	43%	38%	34%	40%	37%
Wirebonding	34%	37%	40%	36%	38%
Others	6%	8%	9%	7%	8%
Testing	15%	15%	15%	15%	15%
Material	2%	2%	2%	2%	2%
Capacity & EBITDA
CapEx (US$ Millions)*	414	404	460	368	422
EBITDA (NT$ Millions)	27,116	47,090	22,566	27,776	21,185
Number of Wirebonders	25,858	25,803	27,574	25,803	23,426
Number of Testers	5,012	4,890	5,862	4,890	4,447

EMS Operations

	1Q22	4Q21	1Q21
Net Revenues (NT$ Millions)	61,166	81,544	47,693
Revenue by Application
Communication	40%	38%	39%
Computing	10%	8%	7%
Consumer	29%	38%	33%
Industrial	13%	11%	14%
Automotive	6%	4%	5%
Others	2%	1%	2%
Capacity
CapEx (US$ Millions)*	26	68	11

* 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)

	Legal Entity Basis						Pro Forma Basis
	For the three months ended						For the three months ended
	Mar. 31 2022		Dec. 31 2021		Mar. 31 2021		Dec. 31 2021		Mar. 31 2021
Net revenues:
Packaging	68,383		75,366		59,033		69,644		54,332
Testing	12,583		13,756		11,130		12,700		10,204
EMS	61,163		81,541		47,684		81,541		47,684
Others	2,262		2,273		1,623		2,273		1,623
Total net revenues	144,391		172,936		119,470		166,158		113,843
Cost of revenues	(115,920)		(140,042)		(97,584)		(134,704)		(92,975)
Gross profit	28,471		32,894		21,886		31,454		20,868
Operating expenses:
Research and development	(5,362)		(5,714)		(4,769)		(5,475)		(4,563)
Selling, general and administrative	(6,996)		(7,565)		(6,209)		(7,203)		(5,900)
Total operating expenses	(12,358)		(13,279)		(10,978)		(12,678)		(10,463)
Operating income	16,113		19,615		10,908		18,776		10,405
Net non-operating (expenses) income:
Interest expense - net	(432)		(553)		(572)		(537)		(552)
Foreign exchange gain (loss)	(1,104)		496		(224)		525		(257)
Gain (loss) on valuation of financial assets and liabilities	1,406		(483)		391		(551)		416
Gain (loss) on equity-method investments	199		192		149		192		149
Others	481		18,069		528		468		464
Total non-operating income (expenses)	550		17,721		272		97		220
Income before tax	16,663		37,336		11,180		18,873		10,625
Income tax expense	(3,278)		(5,592)		(2,451)		(3,586)		(2,392)
Income from continuing operations and before non-controlling interest	13,385		31,744		8,729		15,287		8,233
Non-controlling interest	(478)		(828)		(252)		(828)		(252)
Net income attributable to shareholders of the parent	12,907		30,916		8,477		14,459		7,981
Per share data:
Earnings (losses) per share
– Basic	NT$3.01		NT$7.20		NT$1.97		NT$3.37		NT$1.85
– Diluted	NT$2.92		NT$6.99		NT$1.92		NT$3.21		NT$1.80
Earnings (losses) per equivalent ADS
– Basic	US$0.216		US$0.518		US$0.139		US$0.242		US$0.131
– Diluted	US$0.210		US$0.504		US$0.135		US$0.231		US$0.127
Number of weighted average shares used in diluted EPS calculation (in thousands)	4,341,042		4,343,537		4,357,714		4,343,537		4,357,714
FX (NTD/USD)	27.85		27.78		28.30		27.78		28.30

 

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

(Unaudited)

	Legal Entity Basis						Pro Forma Basis
	For the three months ended						For the three months ended
	Mar. 31 2022		Dec. 31 2021		Mar. 31 2021		Dec. 31 2021		Mar. 31 2021
Net revenues:
Packaging	69,921		76,664		61,545		70,942		56,844
Testing	12,583		13,756		11,131		12,700		10,204
Direct Material	1,479		1,502		1,044		1,502		1,044
Others	42		36		47		36		47
Total net revenues	84,025		91,958		73,767		85,180		68,139
Cost of revenues	(60,924)		(66,217)		(55,760)		(60,879)		(51,150)
Gross profit	23,101		25,741		18,007		24,301		16,989
Operating expenses:
Research and development	(4,136)		(4,479)		(3,697)		(4,241)		(3,490)
Selling, general and administrative	(4,953)		(5,206)		(4,392)		(4,844)		(4,084)
Total operating expenses	(9,089)		(9,685)		(8,089)		(9,085)		(7,574)
Operating income	14,012		16,056		9,918		15,216		9,415

 

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

(Unaudited)

	For the three months ended
	Mar. 31 2022		Dec. 31 2021		Mar. 31 2021
Net revenues	61,166		81,544		47,693
Cost of revenues	(55,786)		(74,436)		(43,682)
Gross profit	5,380		7,108		4,011
Operating expenses:
Research and development	(1,249)		(1,256)		(1,097)
Selling, general and administrative	(1,931)		(2,253)		(1,738)
Total operating expenses	(3,180)		(3,509)		(2,835)
Operating income	2,200		3,599		1,176

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

(Unaudited)

	As of Mar. 31, 2022						As of Dec. 31, 2021
Current assets:
Cash and cash equivalents			84,426				76,073
Financial assets – current			4,698				3,075
Notes and accounts receivable			106,560				115,462
Inventories			86,201				73,245
Others			25,155				24,503
Total current assets			307,040				292,358
Financial assets – non-current & Investments – equity  method			23,202				23,260
Property, plant and equipment			247,541				239,867
Right-of-use assets			10,915				10,680
Intangible assets			75,236				75,980
Others			32,214				30,789
Total assets			696,148				672,934
Current liabilities:
Short-term borrowings			49,990				41,037
Current portion of bonds payable & Current portion of  long-term borrowings			10,825				14,429
Notes and accounts payable			83,898				84,470
Others			106,013				70,992
Total current liabilities			250,726				210,928
Bonds payable			40,521				42,365
Long-term borrowings[2]			116,386				121,946
Other liabilities			24,755				23,062
Total liabilities			432,388				398,301
Equity attributable to shareholders of the parent			248,373				260,077
Non-controlling interests			15,387				14,556
Total liabilities & shareholders' equity			696,148				672,934
Current Ratio			1.22				1.39
Net Debt to Equity Ratio			0.52				0.54

 

     ASE Technology Holding Co., Ltd.
Summary of Consolidated Cash Flow Statements
(In NT$ millions)

(Unaudited)

		For the three months ended
		Mar. 31		Dec. 31		Mar. 31
		2022		2021		2021
Cash Flows from Operating Activities:
Income before tax		16,663		37,336		11,180
Depreciation & amortization		13,503		14,070		13,130
Other operating activities items		(2,986)		(18,488)		(8,559)
Net cash generated from operating activities		27,180		32,918		15,751
Cash Flows from Investing Activities:
Net payments for property, plant and equipment		(17,182)		(16,513)		(14,053)
Other investment activities items		(753)		21,812		(205)
Net cash generated from (used in) investing activities		(17,935)		5,299		(14,258)
Cash Flows from Financing Activities:
Net proceeds from (repayment of) loans		(5,310)		(5,936)		19,600
Other financing activities items		(269)		(9,868)		1,613
Net cash generated from (used in) financing activities		(5,579)		(15,804)		21,213
Foreign currency exchange effect		4,687		241		(461)
Net increase in cash and cash equivalents		8,353		22,654		22,245
Cash and cash equivalents at the beginning of period		76,073		53,419		51,538
Cash and cash equivalents at the end of period		84,426		76,073		73,783

 

[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.

 

Investor Relations Contact:

        ir@aseglobal.com
        Tel: +886.2.6636.5678
        http://www.aseglobal.com

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