ASE Technology Holding Co., Ltd. Reports Unaudited Consolidated Financial Results for the Second Quarter of 2021

Rhea-AI Summary

ASE Technology Holding Co., Ltd. (ASX) reported unaudited net revenues of NT$126,926 million for 2Q21, marking an 18% year-over-year increase and a 6% sequential rise. Net income attributable to shareholders for the quarter was NT$10,338 million, significantly up from NT$6,937 million in 2Q20 and NT$8,477 million in 1Q21. Basic EPS reached NT$2.40 (US$0.171 per ADS) compared to NT$1.63 a year ago. Gross margin improved to 19.5%, with operating margin at 10.4%. Capital expenditures totaled US$611 million, reflecting ongoing investment in operations.

Positive

• Net revenues increased 18% year-over-year to NT$126,926 million.
• Net income rose to NT$10,338 million, up from NT$6,937 million in 2Q20.
• Basic EPS improved to NT$2.40, compared to NT$1.63 for 2Q20.
• Gross margin increased to 19.5% from 18.3% in 1Q21.

Negative

• Cost of revenue rose to NT$102,122 million, impacting profitability.

TAIPEI, Taiwan, R.O.C., July 29, 2021 /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$126,926 million for 2Q21, up by 18% year-over-year and up by 6% sequentially.  Net income attributable to shareholders of the parent for the quarter totaled NT$10,338 million, up from a net income attributable to shareholders of the parent of NT$6,937 million in 2Q20 and up from a net income attributable to shareholders of the parent of NT$8,477 million in 1Q21.  Basic earnings per share for the quarter were NT$2.40 (or US$0.171 per ADS), compared to NT$1.63 for 2Q20 and NT$1.97 for 1Q21.  Diluted earnings per share for the quarter were NT$2.30 (or US$0.164 per ADS), compared to NT$1.60 for 2Q20 and NT$1.92 for 1Q21.  We have completed the identification of the difference between the cost of the investment and our share of the net fair value of Asteelflash's identifiable assets and liabilities in 2Q21; therefore, we retrospectively adjusted the amounts for 1Q21.  Such adjustments included an increase of NT$397 million to total assets, an increase of NT$507 million to total liabilities and a decrease of NT$110 million to shareholders' equity as of March 31, 2021.  The revaluation resulted in an increase of NT$119 million to inventory cost, depreciation, amortization, income tax benefit and non-controlling interest for 1Q21.

RESULTS OF OPERATIONS

2Q21 Results Highlights – Consolidated

• Net revenue contribution from packaging operations, testing operations, EMS operations and others, each represented approximately 51%, 9%, 39% and 1%, respectively, of total net revenues for the quarter.
• Cost of revenue was NT$102,122 million for the quarter, up from NT$97,584 million in 1Q21.
• Raw material cost totaled NT$58,420 million for the quarter, representing 46% of total net revenues.
• Labor cost totaled NT$16,144 million for the quarter, representing 13% of total net revenues.
• Depreciation, amortization and rental expenses totaled NT$12,402 million for the quarter.
• Gross margin increased 1.2 percentage points to 19.5% in 2Q21 from 18.3% in 1Q21.
• Operating margin was 10.4% in 2Q21, compared to 9.1% in 1Q21.
• In terms of non-operating items:
• Net interest expense was NT$569 million.
• Net foreign exchange gain of NT$1,057 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$1,050 million.
• Net gain on equity-method investments was NT$219 million.
• Other net non-operating income of NT$513 million was primarily attributable to miscellaneous income.  Total non-operating income for the quarter was NT$170 million.
• Income before tax was NT$13,344 million for 2Q21, compared to NT$11,180 million in 1Q21.  We recorded income tax expenses of NT$2,648 million for the quarter, compared to NT$2,451 million in 1Q21.
• In 2Q21, net income attributable to shareholders of the parent was NT$10,338 million, compared to NT$6,937 million in 2Q20 and NT$8,477 million in 1Q21.
• Our total number of shares outstanding at the end of the quarter was 4,382,932,382, including treasury stock owned by our subsidiaries.  Our 2Q21 basic earnings per share of NT$2.40 (or US$0.171 per ADS) were based on 4,309,821,394 weighted average numbers of shares outstanding in 2Q21.  Our 2Q21 diluted earnings per share of NT$2.30 (or US$0.164 per ADS) were based on 4,362,634,153 weighted average number of shares outstanding in 2Q21.

2Q21 Results Highlights – ATM^[2]

• Cost of revenues was NT$58,778 million for the quarter, up by 5% sequentially.
• Raw material cost totaled NT$19,808 million for the quarter, representing 25% of total net revenues.
• Labor cost totaled NT$13,706 million for the quarter, representing 17% of total net revenues.
• Depreciation, amortization and rental expenses totaled NT$11,398 million for the quarter.
• Gross margin increased 1.2 percentage points to 25.6% in 2Q21 from 24.4% in 1Q21.
• Operating margin was 15.0% in 2Q21, compared to 13.4% in 1Q21.

2Q21 Results Highlights – EMS

• Cost of revenues for the quarter was NT$44,678 million, up by 2% sequentially.
• Raw material cost totaled NT$38,472 million for the quarter, representing 78% of total net revenues.
• Labor cost totaled NT$2,336 million for the quarter, representing 5% of total net revenues.
• Depreciation, amortization and rental expenses totaled NT$873 million for the quarter.
• Gross margin increased 0.7 percentage points to 9.1% in 2Q21 from 8.4% in 1Q21.
• Operating margin was 2.6% in 2Q21, compared to 2.5% in 1Q21.

LIQUIDITY AND CAPITAL RESOURCES

• Capital expenditures in 2Q21 totaled US$611 million, of which US$450 million were used in packaging operations, US$116 million in testing operations, US$39 million in EMS operations and US$6 million in interconnect materials operations and others.
• As of June 30, 2021, total unused credit lines amounted to NT$276,357 million.
• Current ratio was 1.30 and net debt to equity ratio was 0.60 as of June 30, 2021.
• Total number of employees was 103,164 as of June 30, 2021, compared to 101,785 as of March 31, 2021.

BUSINESS REVIEW

Customers
ATM CONSOLIDATED BASIS

• Our five largest customers together accounted for approximately 43% of our total net revenues in 2Q21, compared to 44% in 1Q21.  Two customers each accounted for more than 10% of our total net revenues in 2Q21 individually.
• Our top 10 customers contributed 55% of our total net revenues both in 2Q21 and 1Q21.
• Our customers that are integrated device manufacturers or IDMs accounted for 31% of our total net revenues both in 2Q21 and 1Q21. 

EMS BASIS

• Our five largest customers together accounted for approximately 70% of our total net revenues in 2Q21, compared to 73% in 1Q21.  One customer accounted for more than 10% of our total net revenues in 2Q21.
• Our top 10 customers contributed 78% of our total net revenues in 2Q21, compared to 80% in 1Q21.

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 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 presentation. 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 presentation. 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 2020 Annual Report on Form 20-F filed on April 6, 2021.

Supplemental Financial Information

Consolidated Operations
	2Q/21	1Q/21	2Q/20
EBITDA (NT$ Millions)	27,350	24,867	22,488
ATM Consolidated Operations
	2Q/21	1Q/21	2Q/20
Net Revenues (NT$ Millions)	78,988	73,767	69,516
Revenues by Application
Communication	50%	50%	54%
Computing	14%	14%	14%
Automotive, Consumer & Others	36%	36%	32%
Revenues by Type
Bumping, Flip Chip, WLP & SiP	33%	34%	38%
Wirebonding	42%	40%	35%
Discrete and Others	8%	9%	7%
Testing	15%	15%	18%
Material	2%	2%	2%
Capacity & EBITDA
CapEx (US$ Millions)*	570	460	424
EBITDA (NT$ Millions)	24,671	22,566	20,037
Number of Wirebonders	29,056	27,574	24,667
Number of Testers	6,001	5,862	5,790
EMS Operations
	2Q/21	1Q/21	2Q/20
Net Revenues (NT$ Millions)	49,154	47,693	39,709
Revenues by End Application
Communication	39%	39%	46%
Computing & Storage	10%	7%	12%
Consumer	28%	33%	28%
Industrial	16%	14%	10%
Automotive	5%	5%	3%
Others	2%	2%	1%
Capacity
CapEx (US$ Millions)*	39	11	70
* 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 2021		Mar. 31 2021[3]		Jun. 30 2020		Jun. 30 2021		Jun. 30 2020
Net revenues:
Packaging	64,149		59,033		53,622		123,182		105,235
Testing	11,676		11,130		12,690		22,806		24,253
EMS	49,147		47,684		39,703		96,831		72,424
Others	1,954		1,623		1,534		3,577		2,994
Total net revenues	126,926		119,470		107,549		246,396		204,906
Cost of revenues	(102,122)		(97,584)		(88,740)		(199,706)		(169,941)
Gross profit	24,804		21,886		18,809		46,690		34,965
Operating expenses:
Research and development	(5,076)		(4,769)		(4,837)		(9,845)		(9,446)
Selling, general and administrative	(6,554)		(6,209)		(5,545)		(12,763)		(11,029)
Total operating expenses	(11,630)		(10,978)		(10,382)		(22,608)		(20,475)
Operating income	13,174		10,908		8,427		24,082		14,490
Net non-operating (expenses) income:
Interest expense - net	(569)		(572)		(771)		(1,141)		(1,664)
Foreign exchange gain (loss)	1,057		(224)		718		833		394
Gain (loss) on valuation of financial assets    and liabilities	(1,050)		391		(17)		(659)		169
Gain (loss) on equity-method investments	219		149		105		368		66
Others	513		528		417		1,041		661
Total non-operating income (expenses)	170		272		452		442		(374)
Income before tax	13,344		11,180		8,879		24,524		14,116
Income tax expense	(2,648)		(2,451)		(1,646)		(5,099)		(2,821)
Income from continuing operations and    before non-controlling interest	10,696		8,729		7,233		19,425		11,295
Non-controlling interest	(358)		(252)		(296)		(610)		(459)
Net income attributable to    shareholders of the parent	10,338		8,477		6,937		18,815		10,836
Per share data:
Earnings (losses) per share
– Basic	NT$2.40		NT$1.97		NT$1.63		NT$4.37		NT$2.54
– Diluted	NT$2.30		NT$1.92		NT$1.60		NT$4.25		NT$2.49
Earnings (losses) per equivalent ADS
– Basic	US$0.171		US$0.139		US$0.109		US$0.310		US$0.170
– Diluted	US$0.164		US$0.135		US$0.107		US$0.302		US$0.166
Number of weighted average shares used in    diluted EPS calculation (in thousands)	4,362,634		4,357,714		4,273,770		4,363,749		4,279,072
FX (NTD/USD)	28.03		28.30		29.94		28.17		29.97

 

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 2021		Mar. 31 2021		Jun. 30 2020		Jun. 30 2021		Jun. 30 2020
Net revenues:
Packaging	65,936		61,545		55,732		127,481		109,332
Testing	11,677		11,131		12,693		22,808		24,259
Direct Material	1,372		1,044		1,051		2,416		2,065
Others	3		47		40		50		69
Total net revenues	78,988		73,767		69,516		152,755		135,725
Cost of revenues	(58,778)		(55,760)		(54,434)		(114,538)		(107,309)
Gross profit	20,210		18,007		15,082		38,217		28,416
Operating expenses:
Research and development	(3,829)		(3,697)		(3,777)		(7,526)		(7,425)
Selling, general and administrative	(4,554)		(4,392)		(4,081)		(8,946)		(8,195)
Total operating expenses	(8,383)		(8,089)		(7,858)		(16,472)		(15,620)
Operating income	11,827		9,918		7,224		21,745		12,796

 

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 2021		Mar. 31 2021[3]		Jun. 30 2020		Jun. 30 2021		Jun. 30 2020
Net revenues:
Total net revenues	49,154		47,693		39,709		96,847		72,436
Cost of revenues	(44,678)		(43,682)		(35,979)		(88,360)		(65,658)
Gross profit	4,476		4,011		3,730		8,487		6,778
Operating expenses:
Research and development	(1,274)		(1,097)		(1,085)		(2,371)		(2,068)
Selling, general and administrative	(1,929)		(1,738)		(1,403)		(3,667)		(2,697)
Total operating expenses	(3,203)		(2,835)		(2,488)		(6,038)		(4,765)
Operating income	1,273		1,176		1,242		2,449		2,013

 

ASE Technology Holding Co., Ltd.
Summary of Consolidated Balance Sheet Data
(In NT$ millions)
(Unaudited)
		As of Jun. 30, 2021		As of Mar. 31, 2021[3]
Current assets:
Cash and cash equivalents		52,987		73,783
Financial assets – current		4,492		5,114
Notes and accounts receivable		88,644		81,726
Inventories		75,869		66,949
Others		15,369		14,629
Total current assets		237,361		242,201
Financial assets – non-current & Investments – equity   method		19,982		19,168
Property plant and equipment		244,861		237,908
Right-of-use assets		9,842		9,067
Intangible assets		78,254		78,810
Others		21,557		19,472
Total assets		611,857		606,626
Current liabilities:
Short-term borrowings		40,460		41,186
Current portion of bonds payable & Current portion of     long-term borrowings		8,563		8,133
Notes and accounts payable		70,893		62,059
Others		62,778		56,472
Total current liabilities		182,694		167,850
Bonds payable		48,474		48,457
Long-term borrowings[4]		106,124		124,247
Other liabilities		20,060		20,078
Total liabilities		357,352		360,632
Equity attributable to shareholders of the parent		238,993		229,671
Non-controlling interests		15,512		16,323
Total liabilities & shareholders' equity		611,857		606,626
Current Ratio		1.30		1.44
Net Debt to Equity Ratio		0.60		0.61

 

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
		2021		2021[3]		2020		2021		2020
Cash Flows from Operating Activities:
Profit before income tax		13,344		11,180		8,879		24,524		14,116
Depreciation & amortization		13,460		13,130		12,785		26,590		25,472
Other operating activities items		(8,573)		(8,559)		(1,659)		(17,132)		(6,135)
Net cash generated from operating    activities		18,231		15,751		20,005		33,982		33,453
Cash Flows from Investing Activities:
Net payments for property, plant    and equipment		(18,440)		(14,053)		(16,587)		(32,493)		(30,192)
Other investment activities items		(1,259)		(205)		1,902		(1,464)		1,697
Net cash used in investing activities		(19,699)		(14,258)		(14,685)		(33,957)		(28,495)
Cash Flows from Financing Activities:
Total net proceeds from    (repayment of) borrowings		(16,640)		19,600		(18,900)		2,960		(5,011)
Other financing activities items		(1,022)		1,613		(457)		591		(262)
Net cash generated from (used in)    financing activities		(17,662)		21,213		(19,357)		3,551		(5,273)
Foreign currency exchange effect		(1,666)		(461)		(1,569)		(2,127)		(1,593)
Net increase (decrease) in cash and    cash equivalents		(20,796)		22,245		(15,606)		1,449		(1,908)
Cash and cash equivalents at the    beginning of period		73,783		51,538		73,829		51,538		60,131
Cash and cash equivalents at the end    of period		52,987		73,783		58,223		52,987		58,223

[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] We have completed the identification of the difference between the cost of the investment and our share of the net fair value of Asteelflash's identifiable assets and liabilities in 2Q21; therefore, we retrospectively adjusted the amounts for 1Q21. Such adjustments included an increase of NT$397 million to total assets, an increase of NT$507 million to total liabilities and a decrease of NT$110 million to shareholders' equity as of March 31 2021. The revaluation resulted in an increase of NT$119 million to inventory cost, depreciation, amortization, income tax benefit and non-controlling interest for 1Q21.

[4] 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 are ASE Technology Holding's 2Q21 financial results?

ASE Technology Holding reported NT$126,926 million in net revenues for 2Q21, with net income of NT$10,338 million.

How much did ASE Technology's EPS increase in 2Q21?

In 2Q21, ASE Technology's basic EPS increased to NT$2.40, up from NT$1.63 in 2Q20.

What was ASE Technology's gross margin in 2Q21?

ASE Technology reported a gross margin of 19.5% in 2Q21, up from 18.3% in the previous quarter.

What are the capital expenditures of ASE Technology in 2Q21?

Capital expenditures in 2Q21 totaled US$611 million, with the majority allocated to packaging operations.

What percentage of ASE Technology's revenues came from its largest customers?

In 2Q21, ASE Technology's five largest customers accounted for approximately 43% of total net revenues.