PR Newswire | Jul 29, 2021 02:45AM EDT

Results for the Second Quarter of 2021

07/29 01:45 CDT

ASE Technology Holding Co., Ltd. Reports Unaudited Consolidated Financial Results for the Second Quarter of 2021 TAIPEI, Taiwan, R.O.C., July 29, 2021

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

CustomersATM 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 isthe 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, breakthroughinnovations, 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 moreinformation, 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 Mar. 31 Jun. 30 Jun. 30 Jun. 30 2021 2021^[3] 2020 2021 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 (5,076) (4,769) (4,837) (9,845) (9,446) development

Selling, general and (6,554) (6,209) (5,545) (12,763) (11,029) administrative

Total operating (11,630) (10,978) (10,382) (22,608) (20,475) expenses

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 1,057 (224) 718 833 394 (loss)

Gain (loss) on valuation of financial(1,050) 391 (17) (659) 169 assets and liabilities

Gain (loss) on equity-method 219 149 105 368 66 investments

Others 513 528 417 1,041 661

Total non-operating 170 272 452 442 (374) income (expenses)

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 10,696 8,729 7,233 19,425 11,295 non-controlling interest

Non-controlling (358) (252) (296) (610) (459) interest



Net income attributable to shareholders of the10,338 8,477 6,937 18,815 10,836 parent



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 4,362,6344,357,7144,273,7704,363,7494,279,072calculation (in thousands)



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 Mar. 31 Jun. 30 Jun. 30 Jun. 30 2021 2021 2020 2021 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 (4,554) (4,392) (4,081) (8,946) (8,195) administrative

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 Mar. 31 Jun. 30 Jun. 30 Jun. 30 2021 2021^[3]2020 2021 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 (1,929) (1,738) (1,403) (3,667) (2,697) administrative

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,As of Mar. 31, 2021 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 19,982 19,168 method

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 & 8,563 8,133 Current portion of long-term borrowings

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 238,993 229,671 the parent

Non-controlling interests 15,512 16,323

Total liabilities & shareholders' 611,857 606,626 equity





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 OperatingActivities:

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 (8,573) (8,559) (1,659) (17,132) (6,135)items

Net cash generated fromoperating 18,231 15,751 20,005 33,982 33,453 activities

Cash Flows from InvestingActivities:

Net payments for property,plant (18,440) (14,053) (16,587) (32,493) (30,192) and equipment

Other investment activities (1,259) (205) 1,902 (1,464) 1,697items

Net cash used in investing (19,699) (14,258) (14,685) (33,957) (28,495)activities

Cash Flows from FinancingActivities:

Total net proceeds from (16,640) 19,600 (18,900) 2,960 (5,011) (repayment of) borrowings

Other financing activities (1,022) 1,613 (457) 591 (262)items

Net cash generated from(used in) (17,662) 21,213 (19,357) 3,551 (5,273) financing activities

Foreign currency exchange (1,666) (461) (1,569) (2,127) (1,593)effect

Net increase (decrease) incash and (20,796) 22,245 (15,606) 1,449 (1,908) cash equivalents

Cash and cash equivalents atthe 73,783 51,538 73,829 51,538 60,131 beginning of period

Cash and cash equivalents atthe end 52,987 73,783 58,223 52,987 58,223 of period

[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.comTel: +886.2.6636.5678 http://www.aseglobal.com

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SOURCE ASE Technology Holding Co., Ltd.