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

Rhea-AI Summary

ASE Technology Holding Co. reported Q2 2022 net revenues of NT$160,439 million, a 26% year-over-year increase and an 11% sequential rise. Net income attributable to shareholders reached NT$15,988 million, up from NT$10,338 million in Q2 2021. Basic earnings per share were NT$3.69, compared to NT$2.40 in Q2 2021. The gross margin increased to 21.4%, with operating margin at 12.8%. The company’s capital expenditures totaled US$515 million. ASEH maintains a solid liquidity position with unused credit lines of NT$312,365 million.

Positive

• Net revenues up 26% year-over-year
• Net income attributable to shareholders increased to NT$15,988 million
• Basic earnings per share rose to NT$3.69
• Gross margin improved to 21.4%
• Operating margin at 12.8%
• Total unused credit lines of NT$312,365 million

Negative

• None.

TAIPEI, Taiwan, R.O.C., July 28, 2022 /PRNewswire/ -- ASE Technology Holding Co., Ltd. (TAIEX: 3711, NYSE: ASX) ("We", "ASEH", or the "Company"), the leading provider of semiconductor assembly and testing services (ATM) and electronic manufacturing services (EMS), today reported its unaudited net revenues[1] of NT$160,439 million for 2Q22, up by 26% year-over-year (or up by 33% year-over-year on pro forma basis) and up by 11% sequentially.  Net income attributable to shareholders of the parent for the quarter totaled NT$15,988 million, up from a net income attributable to shareholders of the parent of NT$10,338 million in 2Q21 (or up from a net income attributable to shareholders of the parent of NT$9,539 million in 2Q21 on pro forma basis) and up from a net income attributable to shareholders of the parent of NT$12,907 million in 1Q22.  Basic earnings per share for the quarter were NT$3.69 (or US$0.253 per ADS), compared to NT$2.40 for 2Q21 (or NT$2.21 for 2Q21 on pro forma basis) and NT$3.01 for 1Q22.  Diluted earnings per share for the quarter were NT$3.61 (or US$0.247 per ADS), compared to NT$2.30 for 2Q21 (or NT$2.12 for 2Q21 on pro forma basis) and NT$2.92 for 1Q22.

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 six months ended 2Q21.  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

2Q22 Results Highlights – Consolidated

• Net revenues contribution from packaging operations, testing operations, EMS operations and others, each represented approximately 49%, 9%, 41% and 1%, respectively, of the total net revenues of the quarter.
• Cost of revenues was NT$126,051 million for the quarter, up from NT$115,920 million in 1Q22.
  - Raw material cost totaled NT$79,348 million for the quarter, representing 50% of the total net revenues.
  - Labor cost totaled NT$17,637 million for the quarter, representing 11% of the total net revenues.
  - Depreciation, amortization and rental expenses totaled NT$12,603 million for the quarter.
• Gross margin increased by 1.7 percentage points to 21.4% in 2Q22 from 19.7% in 1Q22.
• Operating margin was 12.8% in 2Q22, compared to 11.2% in 1Q22.
• In terms of non-operating items:
  - Net interest expense was NT$702 million.
  - Net foreign exchange loss of NT$1,301 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$1,543 million.
  - Net gain on equity-method investments was NT$486 million.
  - Other net non-operating income of NT$504 million was primarily attributable to miscellaneous income.  Total non-operating income for the quarter was NT$530 million.
• Income before tax was NT$21,136 million for 2Q22, compared to NT$16,663 million in 1Q22.  We recorded income tax expenses of NT$4,479 million for the quarter, compared to NT$3,278 million in 1Q22.
• In 2Q22, net income attributable to shareholders of the parent was NT$15,988 million, compared to NT$10,338 million in 2Q21 and NT$12,907 million in 1Q22.
• Our total number of shares outstanding at the end of the quarter was 4,359,927,932, including treasury stock owned by our subsidiaries in 2Q22.  Our 2Q22 basic earnings per share of NT$3.69 (or US$0.253 per ADS) were based on 4,326,986,427 weighted average numbers of shares outstanding in 2Q22.  Our 2Q22 diluted earnings per share of NT$3.61 (or US$0.247 per ADS) were based on 4,375,107,331 weighted average number of shares outstanding in 2Q22.

2Q22 Results Highlights – ATM

• Net revenues were NT$94,998 million, up by 20% year-over-year (or up by 31% year-over-year on pro forma basis) and up by 13% sequentially.
• Cost of revenues was NT$67,230 million for the quarter, up by 10% sequentially.
  - Raw material cost totaled NT$26,615 million for the quarter, representing 28% of the total net revenues.
  - Labor cost totaled NT$14,575 million for the quarter, representing 15% of the total net revenues.
  - Depreciation, amortization and rental expenses totaled NT$11,383 million for the quarter.
• Gross margin increased by 1.7 percentage points to 29.2% in 2Q22 from 27.5% in 1Q22.
• Operating margin was 18.9% in 2Q22, compared to 16.7% in 1Q22.

2Q22 Results Highlights – EMS

• Net revenues were NT$66,218 million, up by 8% sequentially.
• Cost of revenues for the quarter was NT$59,568 million, up by 7% sequentially.
  - Raw material cost totaled NT$52,633 million for the quarter, representing 80% of the total net revenues.
  - Labor cost totaled NT$2,953 million for the quarter, representing 4% of the total net revenues.
  - Depreciation, amortization and rental expenses totaled NT$948 million for the quarter.
• Gross margin increased by 1.2 percentage points to 10.0% in 2Q22 from 8.8% in 1Q22.
• Operating margin was 4.0% in 2Q22, compared to 3.6% in 1Q22.

LIQUIDITY AND CAPITAL RESOURCES

• Capital expenditures in 2Q22 totaled US$515 million, of which US$290 million were used in packaging operations, US$161 million in testing operations, US$53 million in EMS operations and US$11 million in interconnect materials operations and others.
• Total unused credit lines amounted to NT$312,365 million as of June 30, 2022.
• Current ratio was 1.18 and net debt to equity ratio was 0.50 as of June 30, 2022.
• Total number of employees was 97,800 as of June 30, 2022, compared to 94,879 as of March 31, 2022.

BUSINESS REVIEW

Customers
ATM Basis

• Our five largest customers together accounted for approximately 46% of our total net revenues in 2Q22, compared to 47% in 1Q22.  Two customers each accounted for more than 10% of our total net revenues in 2Q22 individually.
• Our top 10 customers contributed 59% of our total net revenues in both 2Q22 and 1Q22.
• Our customers that are integrated device manufacturers or IDMs accounted for 30% of our total net revenues in 2Q22, compared to 29% in 1Q22. 

EMS BASIS

• Our five largest customers together accounted for approximately 66% of our total net revenues in 2Q22, compared to 70% in 1Q22.  One customer accounted for more than 10% of our total net revenues in 2Q22.
• Our top 10 customers contributed 75% of our total net revenues in 2Q22, compared to 79% in 1Q22.

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.

Supplemental Financial Information
(Unaudited)

Consolidated Operations

				Pro Forma Basis
	2Q22	1Q22	2Q21	2Q21
EBITDA (NT$ Millions)	35,211	30,661	27,350	25,663

 

ATM Operations

				Pro Forma Basis
	2Q22	1Q22	2Q21	2Q21
Net Revenues (NT$ Millions)	94,998	84,025	78,988	72,747
Revenue by Application
Communication	52 %	52 %	50 %	52 %
Computing	16 %	16 %	14 %	15 %
Automotive, Consumer & Others	32 %	32 %	36 %	33 %
Revenue by Type
Bumping, Flip Chip, WLP & SiP	43 %	43 %	33 %	36 %
Wirebonding	35 %	34 %	42 %	40 %
Others	6 %	6 %	8 %	7 %
Testing	15 %	15 %	15 %	15 %
Material	1 %	2 %	2 %	2 %
Capacity & EBITDA
CapEx (US$ Millions)*	461	414	570	526
EBITDA (NT$ Millions)	30,940	27,116	24,671	22,984
Number of Wirebonders	25,876	25,858	29,056	24,839
Number of Testers	5,194	5,012	6,001	4,525

 

EMS Operations

	2Q22	1Q22	2Q21
Net Revenues (NT$ Millions)	66,218	61,166	49,154
Revenue by Application
Communication	35 %	40 %	39 %
Computing	13 %	10 %	10 %
Consumer	28 %	29 %	28 %
Industrial	15 %	13 %	16 %
Automotive	8 %	6 %	5 %
Others	1 %	2 %	2 %
Capacity
CapEx (US$ Millions)*	53	26	39
* 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 six months ended
							Pro Forma Basis						Pro Forma Basis
	Jun. 30 2022		Mar. 31 2022		Jun. 30 2021		Jun. 30 2021		Jun. 30 2022		Jun. 30 2021		Jun. 30 2021
Net revenues:
Packaging	78,394		68,383		64,149		58,929		146,777		123,182		113,261
Testing	13,760		12,583		11,676		10,655		26,343		22,806		20,859
EMS	66,213		61,163		49,147		49,147		127,376		96,831		96,831
Others	2,072		2,262		1,954		1,954		4,334		3,577		3,577
Total net revenues	160,439		144,391		126,926		120,685		304,830		246,396		234,528
Cost of revenues	(126,051)		(115,920)		(102,122)		(97,215)		(241,971)		(199,706)		(190,190)
Gross profit	34,388		28,471		24,804		23,470		62,859		46,690		44,338
Operating expenses:
Research and development	(5,795)		(5,362)		(5,076)		(4,864)		(11,157)		(9,845)		(9,427)
Selling, general and administrative	(7,987)		(6,996)		(6,554)		(6,212)		(14,983)		(12,763)		(12,112)
Total operating expenses	(13,782)		(12,358)		(11,630)		(11,076)		(26,140)		(22,608)		(21,539)
Operating income	20,606		16,113		13,174		12,394		36,719		24,082		22,799
Net non-operating income and expenses:
Interest expense - net	(702)		(572)		(569)		(563)		(1,274)		(1,141)		(1,115)
Foreign exchange gain (loss)	(1,301)		(1,104)		1,057		1,072		(2,405)		833		815
Gain (loss) on valuation of financial assets and liabilities	1,543		1,406		(1,050)		(1,114)		2,949		(659)		(698)
Gain on equity-method investments	486		199		219		219		685		368		368
Others	504		621		513		432		1,125		1,041		896
Total non-operating income  and expenses	530		550		170		46		1,080		442		266
Income before tax	21,136		16,663		13,344		12,440		37,799		24,524		23,065
Income tax expense	(4,479)		(3,278)		(2,648)		(2,543)		(7,757)		(5,099)		(4,935)
Income from continuing operations and before non-controlling interest	16,657		13,385		10,696		9,897		30,042		19,425		18,130
Non-controlling interest	(669)		(478)		(358)		(358)		(1,147)		(610)		(610)
Net income attributable to shareholders of the parent	15,988		12,907		10,338		9,539		28,895		18,815		17,520
Per share data:
Earnings per share
– Basic	NT$3.69		NT$3.01		NT$2.40		NT$2.21		NT$6.71		NT$4.37		NT$4.07
– Diluted	NT$3.61		NT$2.92		NT$2.30		NT$2.12		NT$6.51		NT$4.25		NT$3.95
Earnings per equivalent ADS
– Basic	US$0.253		US$0.216		US$0.171		US$0.158		US$0.470		US$0.310		US$0.289
– Diluted	US$0.247		US$0.210		US$0.164		US$0.151		US$0.456		US$0.302		US$0.280
Number of weighted average shares used in diluted EPS calculation (in thousands)	4,375,107		4,341,042		4,362,634		4,362,634		4,359,944		4,363,749		4,363,749
FX (NTD/USD)	29.26		27.85		28.03		28.03		28.56		28.17		28.17

 

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

 

	For the three months ended								For the six months ended
							Pro Forma Basis						Pro Forma Basis
	Jun. 30 2022		Mar. 31 2022		Jun. 30 2021		Jun. 30 2021		Jun. 30 2022		Jun. 30 2021		Jun. 30 2021
Net revenues:
Packaging	79,894		69,921		65,936		60,716		149,815		127,481		117,560
Testing	13,760		12,583		11,677		10,656		26,343		22,808		20,860
Direct Material	1,288		1,479		1,372		1,372		2,767		2,416		2,416
Others	56		42		3		3		98		50		50
Total net revenues	94,998		84,025		78,988		72,747		179,023		152,755		140,886
Cost of revenues	(67,230)		(60,924)		(58,778)		(53,871)		(128,154)		(114,538)		(105,021)
Gross profit	27,768		23,101		20,210		18,876		50,869		38,217		35,865
Operating expenses:
Research and development	(4,455)		(4,136)		(3,829)		(3,616)		(8,591)		(7,526)		(7,106)
Selling, general and administrative	(5,318)		(4,953)		(4,554)		(4,212)		(10,271)		(8,946)		(8,296)
Total operating expenses	(9,773)		(9,089)		(8,383)		(7,828)		(18,862)		(16,472)		(15,402)
Operating income	17,995		14,012		11,827		11,048		32,007		21,745		20,463

 

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

 

	For the three months ended						For the six months ended
	Jun. 30 2022		Mar. 31 2022		Jun. 30 2021		Jun. 30 2022		Jun. 30 2021
Net revenues:
Total net revenues	66,218		61,166		49,154		127,384		96,847
Cost of revenues	(59,568)		(55,786)		(44,678)		(115,354)		(88,360)
Gross profit	6,650		5,380		4,476		12,030		8,487
Operating expenses:
Research and development	(1,380)		(1,249)		(1,274)		(2,629)		(2,371)
Selling, general and administrative	(2,603)		(1,931)		(1,929)		(4,534)		(3,667)
Total operating expenses	(3,983)		(3,180)		(3,203)		(7,163)		(6,038)
Operating income	2,667		2,200		1,273		4,867		2,449

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

	As of Jun. 30, 2022						As of Mar. 31, 2022
Current assets:
Cash and cash equivalents			72,846				84,426
Financial assets – current			6,136				4,698
Notes and accounts receivable			116,617				106,560
Inventories			94,661				86,201
Others			28,503				25,155
Total current assets			318,763				307,040
Financial assets – non-current & Investments – equity  method			22,356				23,202
Property, plant and equipment			254,784				247,541
Right-of-use assets			10,853				10,915
Intangible assets			74,300				75,236
Others			32,023				32,214
Total assets			713,079				696,148
Current liabilities:
Short-term borrowings			60,722				49,990
Current portion of bonds payable & Current portion of  long-term borrowings			11,835				10,825
Notes and accounts payable			86,534				83,898
Others			111,136				106,013
Total current liabilities			270,227				250,726
Bonds payable			40,923				40,521
Long-term borrowings[2]			97,367				116,386
Other liabilities			26,251				24,755
Total liabilities			434,768				432,388
Equity attributable to shareholders of the parent			263,039				248,373
Non-controlling interests			15,272				15,387
Total liabilities & shareholders' equity			713,079				696,148
Current Ratio			1.18				1.22
Net Debt to Equity Ratio			0.50				0.52

 

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

		For the three months ended						For the six months ended
		Jun. 30		Mar. 31		Jun. 30		Jun. 30		Jun. 30
		2022		2022		2021		2022		2021
Cash Flows from Operating Activities:
Profit before income tax		21,136		16,663		13,344		37,799		24,524
Depreciation & amortization		13,749		13,503		13,460		27,252		26,590
Other operating activities items		(19,858)		(2,986)		(8,573)		(22,844)		(17,132)
Net cash generated from operating activities		15,027		27,180		18,231		42,207		33,982
Cash Flows from Investing Activities:
Net payments for property, plant and equipment		(17,292)		(17,182)		(18,440)		(34,474)		(32,493)
Other investment activities items		(245)		(753)		(1,259)		(998)		(1,464)
Net cash used in investing activities		(17,537)		(17,935)		(19,699)		(35,472)		(33,957)
Cash Flows from Financing Activities:
Total net proceeds from (repayment of) borrowings		(8,980)		(5,310)		(16,640)		(14,290)		2,960
Other financing activities items		(893)		(269)		(1,022)		(1,162)		591
Net cash generated from (used in) financing activities		(9,873)		(5,579)		(17,662)		(15,452)		3,551
Foreign currency exchange effect		803		4,687		(1,666)		5,490		(2,127)
Net increase (decrease) in cash and cash equivalents		(11,580)		8,353		(20,796)		(3,227)		1,449
Cash and cash equivalents at the beginning of period		84,426		76,073		73,783		76,073		51,538
Cash and cash equivalents at the end of period		72,846		84,426		52,987		72,846		52,987

 

[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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SOURCE ASE Technology Holding Co., Ltd.

FAQ

What were ASE Technology Holding's Q2 2022 net revenues?

ASE Technology Holding reported net revenues of NT$160,439 million for Q2 2022.

How much did net income attributable to shareholders increase in Q2 2022?

Net income attributable to shareholders increased to NT$15,988 million in Q2 2022.

What was the basic earnings per share for ASE Technology in Q2 2022?

The basic earnings per share for ASE Technology in Q2 2022 were NT$3.69.

What is the gross margin of ASE Technology Holding for Q2 2022?

The gross margin for ASE Technology Holding in Q2 2022 was 21.4%.

What capital expenditures did ASE Technology Holding report for Q2 2022?

ASE Technology Holding reported capital expenditures of US$515 million for Q2 2022.