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

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

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.