UMC Reports Second Quarter 2018 Results
1H results lead to EPS of NT$0.58 per share; MIFS acquisition to fuel long term growth
Second Quarter 2018 Overview1:
- Revenue: NT$38.85 billion (US$1.28 billion)
- Gross margin: 17.2%
- Foundry revenue from 28nm: 15%; Foundry operating margin: 8.4%
- Foundry capacity utilization rate: 97%
- Net Income attributable to stockholders of the parent: NT$3.66 billion (US$120 million)
- Earnings per share: NT$0.30; earnings per ADS: US$0.049
TAIPEI, Taiwan--(BUSINESS WIRE)-- United Microelectronics Corporation (NYSE: UMC; TWSE: 2303) (“UMC” or “The Company”), a leading global semiconductor foundry, today announced its consolidated operating results for the second quarter of 2018.
Second quarter consolidated revenue was NT$38.85 billion, up 3.6% QoQ from NT$37.50 billion in 1Q18 and 3.5% YoY from NT$37.54 billion in 2Q17. Consolidated gross margin for 2Q18 was 17.2%. Net income attributable to stockholders of the parent was NT$3.66 billion, with earnings per ordinary share of NT$0.30.
Jason Wang, co-president of UMC, said, “In the second quarter, foundry revenue increased 3.6% sequentially to NT$38.77 billion. Foundry operating margin was 8.4%. Overall capacity utilization reached 97%, bringing wafer shipments to 1.85 million 8-inch equivalent wafers. The operating results from 2Q18 reflected full utilization from 8" and mature 12" technologies, driven by strong demand in computing and communications segments. This led to a first half EPS of NT$0.58 while generating NT$13.42 billion in free cash flow. To further take advantage of this healthy demand situation, our Board of Directors approved for the company to supplement UMC’s mature 12" process capacity through the full acquisition of Fujitsu’s 300mm MIFS Semiconductor fab in Japan. The Board of Directors also approved a plan for our China-based operations to apply for listing on the Shanghai Stock Exchange, led by UMC’s HeJian.”
Co-president Wang continued, “We project third quarter demand outlook to remain flat due to rising inventory levels from slower smartphone digestion and the uncertainty surrounding the ongoing US-China trade tensions. Despite the current market situation, UMC has always focused on expanding our global scale to enhance customer value by providing a diversified manufacturing base across Asia that is also strategically positioned near our Taiwan headquarters for seamless logistical support. UMC’s intention to acquire MIFS Semiconductor and list our China operations on the Shanghai Stock Exchange corresponds with this global expansion strategy and will fuel our long-term foundry competitiveness. We will continue to strive for manufacturing excellence and better position ourselves globally to create benefits for our shareholders, customers and employees.”
1 Unless otherwise stated, all financial figures discussed in this announcement are prepared in accordance with TIFRSs recognized by Financial Supervisory Commission in the ROC, which is different from IFRSs issued by the International Accounting Standards Board. They represent comparisons among the three-month period ending June 30, 2018, the three-month period ending March 31, 2018, and the equivalent three-month period that ended June 30, 2017. For all 2Q18 results, New Taiwan Dollar (NT$) amounts have been converted into U.S. Dollars at the June 30, 2018 exchange rate of NT$ 30.48 per U.S. Dollar.
Summary of Operating Results
| Operating Results | |||||||||||||||||||
| (Amount: NT$ million) | 2Q18 | 1Q18 | QoQ %change | 2Q17 | YoY %change | ||||||||||||||
| Net Operating Revenues | 38,852 | 37,497 | 3.6 | 37,538 | 3.5 | ||||||||||||||
| Gross Profit | 6,675 | 4,642 | 43.8 | 6,739 | (0.9) | ||||||||||||||
| Operating Expenses | (5,213) | (4,850) | 7.5 | (5,330) | (2.2) | ||||||||||||||
| Net Other Operating Income and Expenses | 1,719 | 977 | 75.9 | 259 | 563.7 | ||||||||||||||
| Operating Income | 3,181 | 769 | 313.7 | 1,668 | 90.7 | ||||||||||||||
| Net Non-Operating Income and Expenses | (1,095) | 1,088 | - | 448 | - | ||||||||||||||
| Net Income Attributable to Stockholders of the Parent | 3,659 | 3,400 | 7.6 | 2,099 | 74.3 | ||||||||||||||
|
EPS (NT$ per share) |
0.30 | 0.28 | 0.17 | ||||||||||||||||
|
(US$ per ADS) |
0.049 | 0.046 | 0.028 | ||||||||||||||||
Net operating revenues in 2Q18 increased 3.6% to NT$38.85 billion, including NT$38.77 billion from the foundry segment. Revenue contribution from 40nm and below technologies remained at 44%. Gross profit increased 43.8% to NT$6.68 billion, or 17.2% of revenue. Operating expenses increased 7.5% to NT$5.21 billion. Net other operating income was NT$1.72 billion, leading to operating income of NT$3.18 billion. Net non-operating expense was NT$1.10 billion. Net income attributable to stockholders of the parent was NT$3.66 billion.
Earnings per ordinary share for the quarter was NT$0.30. Earnings per ADS was US$0.049. The basic weighted average number of outstanding shares in 2Q18 was 12,048,575,089, compared with 12,202,773,078 shares in 1Q18 and 12,208,239,978 shares in 2Q17. The diluted weighted average number of outstanding shares was 13,268,862,054 in 2Q18, compared with 13,457,161,259 shares in 1Q18 and 13,383,329,206 shares in 2Q17. The fully diluted share count on June 30, 2018 was approximately 13,644,606,000. On June 30, 2018, UMC held 600 million treasury shares acquired from the 16th, 17th and 18th share buy-back programs.
Detailed Financials Section
| COGS & Expenses | |||||||||||||||||||
| (Amount: NT$ million) | 2Q18 | 1Q18 | QoQ %change | 2Q17 | YoY %change | ||||||||||||||
| Net Operating Revenues | 38,852 | 37,497 | 3.6 | 37,538 | 3.5 | ||||||||||||||
| COGS | (32,177) | (32,855) | (2.1) | (30,799) | 4.5 | ||||||||||||||
| Depreciation | (12,139) | (11,815) | 2.7 | (11,100) | 9.4 | ||||||||||||||
| Other Mfg. Costs | (20,038) | (21,040) | (4.8) | (19,699) | 1.7 | ||||||||||||||
| Gross Profit | 6,675 | 4,642 | 43.8 | 6,739 | (0.9) | ||||||||||||||
| Gross Margin (%) | 17.2% | 12.4% | 18.0% | ||||||||||||||||
| Operating Expenses | (5,213) | (4,850) | 7.5 | (5,330) | (2.2) | ||||||||||||||
| G&A | (1,083) | (1,017) | 6.5 | (1,035) | 4.6 | ||||||||||||||
| Sales & Marketing | (1,103) | (909) | 21.3 | (1,049) | 5.1 | ||||||||||||||
| R&D | (3,027) | (2,924) | 3.5 | (3,246) | (6.7) | ||||||||||||||
|
Net Other Operating
Income & Expenses |
1,719 | 977 | 75.9 | 259 | 563.7 | ||||||||||||||
| Operating Income | 3,181 | 769 | 313.7 | 1,668 | 90.7 | ||||||||||||||
Net operating revenues grew 3.6% to NT$38.85 billion. COGS decreased 2.1% to NT$32.18 billion, as depreciation increased 2.7% to NT$12.14 billion while other manufacturing costs decreased 4.8% to NT$20.04 billion. Gross profit was NT$6.68 billion. Operating expenses increased 7.5% to NT$5.21 billion. General and Administrative (G&A) expenses increased 6.5% to NT$1.08 billion. Sales & Marketing expenses increased 21.3% to NT$1.10 billion and R&D expenses was up 3.5% to NT$3.03 billion, or 7.8% of net operating revenues. Net other operating income was NT$1.72 billion, leading to an operating income of NT$3.18 billion.
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Non-Operating Income and Expenses |
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| (Amount: NT$ million) | 2Q18 | 1Q18 | 2Q17 | ||||||||||
| Non-Operating Income and Expenses | (1,095) | 1,088 | 448 | ||||||||||
| Net Interest Income and Expenses | (505) | (529) | (502) | ||||||||||
| Net Investment Gain and Loss | 105 | 582 | 228 | ||||||||||
| Exchange Gain and Loss | (720) | 1,021 | 807 | ||||||||||
| Other Gain and Loss | 25 | 14 | (85) | ||||||||||
Net non-operating expense in 2Q18 was NT$1.10 billion, which primarily resulted from NT$720 million in exchange loss and NT$505 million in net interest expense, which were partially offset by a NT$105 million in net investment gain.
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Cash Flow Summary |
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| (Amount: NT$ million) |
For the 3-MonthPeriod EndedJun. 30, 2018 |
For the 3-MonthPeriod EndedMar. 31, 2018 |
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| Cash Flow from Operating Activities | 14,264 | 8,776 | ||||||||
| Net income before tax | 2,086 | 1,857 | ||||||||
| Depreciation & Amortization | 13,373 | 13,288 | ||||||||
|
Net loss (gain) of financial assets
and liabilities at FVTPL |
112 | (377) | ||||||||
| Exchange loss (gain) on financial assets and liabilities | 1,516 | (1,356) | ||||||||
| Changes in working capital | (1,354) | (3,231) | ||||||||
| Interest paid | (911) | (312) | ||||||||
| Income tax paid | (86) | (632) | ||||||||
| Other | (472) | (461) | ||||||||
| Cash Flow from Investing Activities | (6,077) | 666 | ||||||||
| Capital expenditures | (3,901) | (5,716) | ||||||||
| Acquisition of investments accounted for under the equity method | (840) | - | ||||||||
| Changes in refundable deposits | (980) | 60 | ||||||||
| Acquisition of intangible assets | (130) | (248) | ||||||||
| Other | (226) | 6,570 | ||||||||
| Cash Flow from Financing Activities | (10,795) | (13,714) | ||||||||
| Bank loans | (8,859) | (5,561) | ||||||||
| Redemption of bonds | - | (7,500) | ||||||||
| Treasury stock acquired | (2,534) | (595) | ||||||||
| Other | 598 | (58) | ||||||||
| Effect of Exchange Rate | 657 | (260) | ||||||||
| Net Cash Flow | (1,951) | (4,532) | ||||||||
Cash inflow from operating activities was NT$14.26 billion. Cash outflow from investing activities totaled NT$6.08 billion, including NT$3.90 billion in CAPEX spending for the foundry segment, resulting in free cash flow of NT$10.36 billion. Cash outflow from financing activities totaled NT$10.80 billion, mainly from NT$8.86 billion in bank loan payments and NT$2.53 billion in share buyback. Net cash outflow in 2Q18 was NT$1.95 billion. Over the next 12 months, the company expects to repay NT$3.11 billion in bank loans.
| Current Assets | |||||||||||||
| (Amount: NT$ billion) | 2Q18 | 1Q18 | 2Q17 | ||||||||||
| Cash and Cash Equivalents | 75.19 | 77.14 | 68.13 | ||||||||||
| Notes & Accounts Receivable | 27.01 | 25.01 | 22.23 | ||||||||||
| Days Sales Outstanding | 61 | 56 | 52 | ||||||||||
| Inventories, net | 17.66 | 17.14 | 16.28 | ||||||||||
| Days of Inventory | 49 | 49 | 48 | ||||||||||
| Total Current Assets | 137.08 | 136.42 | 120.08 | ||||||||||
Cash and cash equivalents decreased to NT$75.19 billion. Days of inventory remained at 49 days.
| Liabilities | |||||||||||||
| (Amount: NT$ billion) | 2Q18 | 1Q18 | 2Q17 | ||||||||||
| Total Current Liabilities | 59.17 | 72.57 | 87.70 | ||||||||||
| Notes & Accounts Payable | 7.41 | 7.00 | 6.65 | ||||||||||
| Short-Term Credit / Bonds | 17.23 | 40.00 | 48.19 | ||||||||||
| Payable on Equipment | 3.61 | 2.97 | 5.28 | ||||||||||
| Dividends payable | 8.56 | - | 6.11 | ||||||||||
| Other | 22.36 | 22.60 | 21.47 | ||||||||||
| Long-Term Credit / Bonds | 67.76 | 52.61 | 51.24 | ||||||||||
| Long-Term Investment Liabilities | 20.79 | 20.90 | 19.92 | ||||||||||
| Total Liabilities | 170.11 | 169.35 | 172.62 | ||||||||||
| Debt to Equity | 81% | 78% | 81% | ||||||||||
Current liabilities decreased to NT$59.17 billion, mainly from a decrease in Short-Term Credit/Bonds. Total liabilities increased to NT$170.11 billion, mainly from the increase in Long-Term Credit/Bonds, leading to a debt to equity ratio of 81%.
Analysis of Revenue2 for Foundry Segment
| Revenue Breakdown by Region | |||||||||||||||||||
| Region | 2Q18 | 1Q18 | 4Q17 | 3Q17 | 2Q17 | ||||||||||||||
| North America | 37% | 42% | 43% | 43% | 42% | ||||||||||||||
| Asia Pacific | 51% | 47% | 45% | 47% | 47% | ||||||||||||||
| Europe | 9% | 8% | 9% | 8% | 7% | ||||||||||||||
| Japan | 3% | 3% | 3% | 2% | 4% | ||||||||||||||
Revenue from Asia Pacific increased to 51%, while contribution from North American customers declined to 37%. Revenue from Japan remained at 3%.
| Revenue Breakdown by Geometry | |||||||||||||||||||
| Geometry | 2Q18 | 1Q18 | 4Q17 | 3Q17 | 2Q17 | ||||||||||||||
| 14nm and below | 3% | 2% | 2% | 1% | 1% | ||||||||||||||
14nm|
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15%
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12%
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15%
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15%
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17%
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28nm|
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26%
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30%
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28%
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29%
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28%
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40nm|
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12%
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13%
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12%
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12%
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12%
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65nm|
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7%
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6%
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5%
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6%
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5%
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90nm|
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11%
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11%
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12%
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12%
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12%
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0.13um|
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13%
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13%
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13%
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12%
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12%
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0.18um|
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10%
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10%
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10%
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10%
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10%
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| 0.5um and above | 3% | 3% | 3% | 3% | 3% | ||||||||||||||
Business from 14nm increased to 3% of 2Q18 revenue, while 28nm contribution was 15%.
| Revenue Breakdown by Customer Type | |||||||||||||||||||
| Customer Type | 2Q18 | 1Q18 | 4Q17 | 3Q17 | 2Q17 | ||||||||||||||
| Fabless | 92% | 92% | 91% | 90% | 91% | ||||||||||||||
| IDM | 8% | 8% | 9% | 10% | 9% | ||||||||||||||
Revenue from fabless customers remained at 92% of revenue.
| Revenue Breakdown by Application (1) | |||||||||||||||||||
| Application | 2Q18 | 1Q18 | 4Q17 | 3Q17 | 2Q17 | ||||||||||||||
| Computer | 16% | 14% | 13% | 14% | 14% | ||||||||||||||
| Communication | 47% | 47% | 49% | 47% | 48% | ||||||||||||||
| Consumer | 28% | 29% | 29% | 31% | 29% | ||||||||||||||
| Others | 9% | 10% | 9% | 8% | 9% | ||||||||||||||
The communication segment remained at 47% of sales, while revenue from consumer applications declined to 28%.
(1) Computer consists of ICs such as CPU, GPU, HDD controllers, DVD/CD-RW control ICs, PC chipset, audio codec, keyboard controller, monitor scaler, USB, I/O chipset. Communication consists of handset components, broadband, WLAN, bluetooth, Ethernet, LAN, DSP, etc. Consumer consists of ICs used for DVD players, DTV, STB, MP3/MP4, flash controller, game consoles, DSC, smart cards, toys, etc.2 Revenue in this section represents wafer sales
Blended ASP Trend for Foundry Segment
Blended average selling price (ASP) in 2Q18 declined slightly.
(To view ASP trend, visit http://www.umc.com/english/investors/2Q18_ASP_trend.asp)
Shipment and Utilization Rate3 for Foundry Segment
| Wafer Shipments | |||||||||||||||||||
| 2Q18 | 1Q18 | 4Q17 | 3Q17 | 2Q17 | |||||||||||||||
| Wafer Shipments(8” K equivalents) | 1,846 | 1,747 | 1,670 | 1,748 | 1,741 | ||||||||||||||
| Quarterly Capacity Utilization Rate | |||||||||||||||||||
| 2Q18 | 1Q18 | 4Q17 | 3Q17 | 2Q17 | |||||||||||||||
| Utilization Rate | 97% | 94% | 90% | 96% | 96% | ||||||||||||||
| Total Capacity(8” K equivalents) | 1,918 | 1,858 | 1,886 | 1,861 | 1,816 | ||||||||||||||
In 2Q18, wafer shipments grew 5.7% to 1,846K. Quarterly capacity increased 3.2% QoQ to 1,918K, resulting in an overall utilization rate of 97% in 2Q18.
3 Utilization Rate = Quarterly Wafer Out / Quarterly Capacity
Capacity4 for Foundry Segment
Total capacity in the second quarter amounted to 1,918K 8-inch equivalent wafers. We expect capacity in the third quarter to grow 1.0% QoQ to 1,938K 8-inch equivalent wafers, including the capacity expansion at Fab 12i and USCXM.
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Annual Capacity inthousands of wafers |
Quarterly Capacity inthousands of wafers |
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| FAB | Geometry(um) | 2017 | 2016 | 2015 | 2014 | FAB | 3Q18E | 2Q18 | 1Q18 | 4Q17 | |||||||||||||||||||||||||||||
| WTK | 6" | 3.5 – 0.45 | 422 | 423 | 421 | 448 | WTK | 93 | 106 | 104 | 106 | ||||||||||||||||||||||||||||
| Fab 8A | 8" | 0.5 – 0.25 | 825 | 827 | 813 | 813 | Fab 8A | 207 | 207 | 204 | 207 | ||||||||||||||||||||||||||||
| Fab 8C | 8" | 0.35 – 0.11 | 357 | 348 | 347 | 347 | Fab 8C | 92 | 92 | 91 | 92 | ||||||||||||||||||||||||||||
| Fab 8D | 8" | 0.13 – 0.09 | 341 | 342 | 341 | 358 | Fab 8D | 86 | 86 | 85 | 86 | ||||||||||||||||||||||||||||
| Fab 8E | 8" | 0.5 – 0.18 | 418 | 419 | 418 | 418 | Fab 8E | 105 | 105 | 103 | 105 | ||||||||||||||||||||||||||||
| Fab 8F | 8" | 0.18 – 0.11 | 417 | 401 | 388 | 388 | Fab 8F | 108 | 108 | 107 | 108 | ||||||||||||||||||||||||||||
| Fab 8S | 8" | 0.18 – 0.11 | 347 | 336 | 335 | 335 | Fab 8S | 93 | 93 | 92 | 93 | ||||||||||||||||||||||||||||
| HJ | 8" | 0.5 – 0.11 | 753 | 750 | 667 | 547 | HJ | 194 | 194 | 190 | 194 | ||||||||||||||||||||||||||||
| Fab 12A | 12" | 0.13 – 0.014 | 970 | 885 | 793 | 700 | Fab 12A | 250 | 250 | 246 | 250 | ||||||||||||||||||||||||||||
| Fab 12i | 12" | 0.13 – 0.040 | 537 | 584 | 572 | 573 | Fab 12i | 144 | 136 | 131 | 134 | ||||||||||||||||||||||||||||
| USCXM | 12" | 0.040 – 0.028 | 97 | 9 | - | - | USCXM | 51 | 46 | 35 | 35 | ||||||||||||||||||||||||||||
| Total(1) | 7,304 | 6,983 | 6,617 | 6,323 | Total | 1,938 | 1,918 | 1,858 | 1,886 | ||||||||||||||||||||||||||||||
| YoY Growth Rate | 5% | 6% | 5% | 4% | |||||||||||||||||||||||||||||||||||
(1) One 6-inch wafer is converted into 0.5625(62/82) 8-inch equivalent wafer; one 12-inch wafer is converted into 2.25(122/82) 8-inch equivalent wafers. Capacity total figures are expressed in 8-inch equivalent wafers.
CAPEX for Foundry Segment
| Capital Expenditure by Year - in US$ billion | |||||||||||||||||||||||||||
| Year | 2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||||||||
| CAPEX | $ | 1.4 | $ | 2.8 | $ | 1.9 | $ | 1.4 | $ | 1.1 | |||||||||||||||||
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2018 CAPEX Plan |
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| 8" |
12" |
Total |
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33% |
|
67% |
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US$1.1 billion |
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CAPEX spending in 2Q18 was US$131 million, bringing first half 2018 capital expenditures to US$326 million. Full year 2018 CAPEX plan is budgeted for US$1.1 billion.
4 Estimated capacity numbers are based on calculated maximum output rather than designed capacity. The actual capacity numbers may differ depending upon equipment delivery schedules, pace of migration to more advanced process technologies, and other factors affecting production ramp-up.
Third Quarter of 2018 Outlook & Guidance
Quarter-over-Quarter Guidance:
- Wafer Shipments: To remain flat
- ASP in USD: Marginal increase
- Profitability: Gross profit margin will be in the mid-teens % range
- Foundry Segment Capacity Utilization: Low 90% range
- 2018 CAPEX for Foundry Segment: US$1.1 billion
Recent Developments / Announcements
| Jul. 3, 2018 | |||||||
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| Jun. 29, 2018 | |||||||
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| Jun. 12, 2018 |
UMC Shareholders Elect 14(th) Term of Directors at Annual Shareholders Meeting |
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| May 29, 2018 |
UMC Earns Highest Ranks in Corporate Governance Evaluation for 4th Consecutive Year |
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| May 24, 2018 | |||||||
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| Apr. 26, 2018 |
UMC Files Form 20-F for 2017 with US Securities and Exchange Commission |
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| Apr. 25, 2018 | |||||||
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Please visit UMC’s website for further details regarding the above announcements
Conference Call / Webcast Announcement
Wednesday, July 25, 2018
Time: 5:00 PM (Taipei) / 5:00 AM (New York) / 10:00 AM (London)
Dial-in numbers and Access Codes:USA Toll Free: 1-866 836-0101Taiwan Number: 02-2192-8016Other Areas: +886-2-2192-8016
Access Code: UMC
A live webcast and replay of the 2Q18 results announcement will be available at www.umc.com under the “Investors / Events” section.
About UMC
UMC (NYSE: UMC, TWSE: 2303) is a leading global semiconductor foundry that provides advanced IC production for applications spanning every major sector of the electronics industry. UMC’s comprehensive foundry solutions enable chip designers to leverage the company’s sophisticated technology and manufacturing, which include world-class 28nm High-K/Metal Gate technology, 14nm FinFET volume production, specialty process platforms specifically developed for AI, 5G and IoT applications and the automotive industry’s highest-rated AEC-Q100 Grade-0 manufacturing capabilities for the production of ICs found in vehicles. UMC’s 11 wafer fabs are strategically located throughout Asia and are able to produce over 600,000 wafers per month. The company employs more than 20,000 people worldwide, with offices in Taiwan, China, Europe, Japan, Korea, Singapore, and the United States. UMC can be found on the web at http://www.umc.com.
Note from UMC Concerning Forward-Looking Statements
Some of the statements in the foregoing announcement are forward-looking within the meaning of the U.S. Federal Securities laws, including statements about introduction of new services and technologies, future outsourcing, competition, wafer capacity, business relationships and market conditions. Investors are cautioned that actual events and results could differ materially from these statements as a result of a variety of factors, including conditions in the overall semiconductor market and economy; acceptance and demand for products from UMC; and technological and development risks. Further information regarding these and other risks is included in UMC’s filings with the U.S. Securities and Exchange Commission. UMC does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.
Safe Harbor Statements
This release contains forward-looking statements. These statements constitute “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, and as defined in the United States Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by use of words such as “strategy,” “expects,” “continues,” “plans,” “anticipates,” “believes,” “will,” “estimates,” “intends,” “projects,” “goals,” “targets” and other words of similar meaning. You can also identify them by the fact that they do not relate strictly to historical or current facts.
These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual performance, financial condition or results of operations of UMC to be materially different from what is stated or may be implied in such forward-looking statements. Investors are cautioned that actual events and results could differ materially from those statements as a result of a number of factors including, but not limited to: (i) dependence upon the frequent introduction of new services and technologies based on the latest developments in the industry in which UMC operates; (ii) the intensely competitive semiconductor, communications, consumer electronics and computer industries and markets; (iii) the risks associated with international business activities; (iv) dependence upon key personnel; (v) general economic and political conditions; (vi) possible disruptions in commercial activities caused by natural and human-induced events and disasters, including natural disasters, terrorist activity, armed conflict and highly contagious diseases; (vii) reduced end-user purchases relative to expectations and orders; and (viii) fluctuations in foreign currency exchange rates. Further information regarding these and other risks is included in UMC’s filings with the United States Securities and Exchange Commission. All information provided in this release is as of the date of this release and are based on assumptions that UMC believes to be reasonable as of this date, and UMC does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.
The financial statements included in this release are prepared and published in accordance with Taiwan International Financial Reporting Standards, or TIFRSs, recognized by the Financial Supervisory Commission in the ROC, which is different from International Financial Reporting Standards, or IFRSs, issued by the International Accounting Standards Board. Investors are cautioned that there may be significant differences between TIFRSs and IFRSs. In addition, TIFRSs and IFRSs differ in certain significant respects from generally accepted accounting principles in the ROC and generally accepted accounting principles in the United States.
This presentation is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer or selling security holder and that will contain detailed information about the company and management, as well as financial statements.
- FINANCIAL TABLES TO FOLLOW -
| UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES | |||||||||||||||
| Consolidated Condensed Balance Sheet | |||||||||||||||
|
As of June 30, 2018 |
|||||||||||||||
| Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$) | |||||||||||||||
| June 30, 2018 | |||||||||||||||
| US$ | NT$ | % | |||||||||||||
| Assets | |||||||||||||||
| Current assets | |||||||||||||||
| Cash and cash equivalents | 2,467 | 75,193 | 19.7% | ||||||||||||
| Financial assets at fair value through profit or loss, current | 15 | 470 | 0.1% | ||||||||||||
| Contract assets, current | 5 | 152 | 0.0% | ||||||||||||
| Notes & Accounts receivable, net | 886 | 27,012 | 7.1% | ||||||||||||
| Inventories, net | 579 | 17,656 | 4.6% | ||||||||||||
| Other current assets | 545 | 16,600 | 4.5% | ||||||||||||
| Total current assets | 4,497 | 137,083 | 36.0% | ||||||||||||
| Non-current assets | |||||||||||||||
| Funds and investments | 1,225 | 37,334 | 9.8% | ||||||||||||
| Property, plant and equipment | 6,195 | 188,825 | 49.6% | ||||||||||||
| Other non-current assets | 579 | 17,648 | 4.6% | ||||||||||||
| Total non-current assets | 7,999 | 243,807 | 64.0% | ||||||||||||
| Total assets | 12,496 | 380,890 | 100.0% | ||||||||||||
| Liabilities | |||||||||||||||
| Current liabilities | |||||||||||||||
| Short-term loans | 381 | 11,620 | 3.0% | ||||||||||||
| Financial liabilities at fair value through profit or loss, current | 1 | 39 | 0.0% | ||||||||||||
| Contract liabilities, current | 69 | 2,115 | 0.6% | ||||||||||||
| Payables | 859 | 26,187 | 6.8% | ||||||||||||
| Dividends payable | 281 | 8,557 | 2.3% | ||||||||||||
| Current portion of long-term liabilities | 184 | 5,612 | 1.5% | ||||||||||||
| Other current liabilities | 166 | 5,041 | 1.3% | ||||||||||||
| Total current liabilities | 1,941 | 59,171 | 15.5% | ||||||||||||
| Non-current liabilities | |||||||||||||||
| Bonds payable | 1,270 | 38,699 | 10.2% | ||||||||||||
| Long-term loans | 954 | 29,065 | 7.6% | ||||||||||||
| Other non-current liabilities | 1,416 | 43,173 | 11.4% | ||||||||||||
| Total non-current liabilities | 3,640 | 110,937 | 29.2% | ||||||||||||
| Total liabilities | 5,581 | 170,108 | 44.7% | ||||||||||||
| Equity | |||||||||||||||
| Equity attributable to the parent company | |||||||||||||||
| Capital | 4,142 | 126,243 | 33.2% | ||||||||||||
| Additional paid-in capital | 1,344 | 40,968 | 10.8% | ||||||||||||
|
Retained earnings, unrealized gains or losses on financial assets measured at fair value through other comprehensive income and exchange differences on translation of foreign operations |
1,667 | 50,809 | 13.3% | ||||||||||||
| Treasury stock | (258) | (7,848) | (2.1%) | ||||||||||||
| Total equity attributable to the parent company | 6,895 | 210,172 | 55.2% | ||||||||||||
| Non-controlling interests | 20 | 610 | 0.1% | ||||||||||||
| Total equity | 6,915 | 210,782 | 55.3% | ||||||||||||
| Total liabilities and equity | 12,496 | 380,890 | 100.0% | ||||||||||||
| Note：New Taiwan Dollars have been translated into U.S. Dollars at the June 30, 2018 exchange rate of NT $30.48 per U.S. Dollar. | |||||||||||||||
| UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||||||||||||||||||||||
| Consolidated Condensed Statements of Comprehensive Income | ||||||||||||||||||||||||||||||||||||||||
| Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$) | ||||||||||||||||||||||||||||||||||||||||
| Except Per Share and Per ADS Data | ||||||||||||||||||||||||||||||||||||||||
| Year over Year Comparison | Quarter over Quarter Comparison | |||||||||||||||||||||||||||||||||||||||
| Three-Month Period Ended | Three-Month Period Ended | |||||||||||||||||||||||||||||||||||||||
| June 30, 2018 | June 30, 2017 | Chg. | June 30, 2018 | March 31, 2018 | Chg. | |||||||||||||||||||||||||||||||||||
| US$ | NT$ | US$ | NT$ | % | US$ | NT$ | US$ | NT$ | % | |||||||||||||||||||||||||||||||
| Net operating revenues | 1,275 | 38,852 | 1,232 | 37,538 | 3.5% | 1,275 | 38,852 | 1,230 | 37,497 | 3.6% | ||||||||||||||||||||||||||||||
| Operating costs | (1,056) | (32,177) | (1,011) | (30,799) | 4.5% | (1,056) | (32,177) | (1,078) | (32,855) | (2.1%) | ||||||||||||||||||||||||||||||
| Gross profit | 219 | 6,675 | 221 | 6,739 | (0.9%) | 219 | 6,675 | 152 | 4,642 | 43.8% | ||||||||||||||||||||||||||||||
| 17.2% | 17.2% | 18.0% | 18.0% | 17.2% | 17.2% | 12.4% | 12.4% | |||||||||||||||||||||||||||||||||
| Operating expenses | ||||||||||||||||||||||||||||||||||||||||
| - Sales and marketing expenses | (36) | (1,103) | (34) | (1,049) | 5.1% | (36) | (1,103) | (30) | (909) | 21.3% | ||||||||||||||||||||||||||||||
| - General and administrative expenses | (36) | (1,083) | (34) | (1,035) | 4.6% | (36) | (1,083) | (33) | (1,017) | 6.5% | ||||||||||||||||||||||||||||||
| - Research and development expenses | (99) | (3,027) | (107) | (3,246) | (6.7%) | (99) | (3,027) | (96) | (2,924) | 3.5% | ||||||||||||||||||||||||||||||
| Subtotal | (171) | (5,213) | (175) | (5,330) | (2.2%) | (171) | (5,213) | (159) | (4,850) | 7.5% | ||||||||||||||||||||||||||||||
| Net other operating income and expenses | 56 | 1,719 | 9 | 259 | 563.7% | 56 | 1,719 | 32 | 977 | 75.9% | ||||||||||||||||||||||||||||||
| Operating income | 104 | 3,181 | 55 | 1,668 | 90.7% | 104 | 3,181 | 25 | 769 | 313.7% | ||||||||||||||||||||||||||||||
| 8.2% | 8.2% | 4.4% | 4.4% | 8.2% | 8.2% | 2.1% | 2.1% | |||||||||||||||||||||||||||||||||
| Net non-operating income and expenses | (36) | (1,095) | 14 | 448 | - | (36) | (1,095) | 36 | 1,088 | - | ||||||||||||||||||||||||||||||
|
Income from continuing operations before income tax |
68 | 2,086 | 69 | 2,116 | (1.4%) | 68 | 2,086 | 61 | 1,857 | 12.3% | ||||||||||||||||||||||||||||||
| 5.4% | 5.4% | 5.6% | 5.6% | 5.4% | 5.4% | 5.0% | 5.0% | |||||||||||||||||||||||||||||||||
| Income tax benefit (expense) | 11 | 331 | (21) | (638) | - | 11 | 331 | 38 | 1,173 | (71.8%) | ||||||||||||||||||||||||||||||
| Net income | 79 | 2,417 | 48 | 1,478 | 63.5% | 79 | 2,417 | 99 | 3,030 | (20.2%) | ||||||||||||||||||||||||||||||
| 6.2% | 6.2% | 3.9% | 3.9% | 6.2% | 6.2% | 8.1% | 8.1% | |||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | 87 | 2,641 | 46 | 1,396 | 89.2% | 87 | 2,641 | (7) | (234) | - | ||||||||||||||||||||||||||||||
| Total comprehensive income (loss) | 166 | 5,058 | 94 | 2,874 | 76.0% | 166 | 5,058 | 92 | 2,796 | 80.9% | ||||||||||||||||||||||||||||||
|
Net income attributable to: |
||||||||||||||||||||||||||||||||||||||||
| Stockholders of the parent | 120 | 3,659 | 69 | 2,099 | 74.3% | 120 | 3,659 | 112 | 3,400 | 7.6% | ||||||||||||||||||||||||||||||
| Non-controlling interests | (41) | (1,242) | (21) | (621) | 100.0% | (41) | (1,242) | (13) | (370) | 235.7% | ||||||||||||||||||||||||||||||
| Comprehensive income (loss) attributable to: | ||||||||||||||||||||||||||||||||||||||||
| Stockholders of the parent | 207 | 6,297 | 114 | 3,488 | 80.5% | 207 | 6,297 | 104 | 3,158 | 99.4% | ||||||||||||||||||||||||||||||
| Non-controlling interests | (41) | (1,239) | (20) | (614) | 101.8% | (41) | (1,239) | (12) | (362) | 242.3% | ||||||||||||||||||||||||||||||
| Earnings per share-basic | 0.010 | 0.30 | 0.006 | 0.17 | 0.010 | 0.30 | 0.009 | 0.28 | ||||||||||||||||||||||||||||||||
| Earnings per ADS (2) | 0.049 | 1.50 | 0.028 | 0.85 | 0.049 | 1.50 | 0.046 | 1.40 | ||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||||||
|
Weighted average number of sharesoutstanding (in millions) |
12,049 | 12,208 | 12,049 | 12,203 | ||||||||||||||||||||||||||||||||||||
| Notes: | ||||||||||||||||||||||||||||||||||||||||
|
(1) New Taiwan Dollars have been translated into U.S. Dollars at the June 30, 2018 exchange rate of NT $30.48 per U.S. Dollar. |
||||||||||||||||||||||||||||||||||||||||
| (2) 1 ADS equals 5 common shares. | ||||||||||||||||||||||||||||||||||||||||
| UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES | |||||||||||||||||||||||
| Consolidated Condensed Statements of Comprehensive Income | |||||||||||||||||||||||
| Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$) | |||||||||||||||||||||||
| Except Per Share and Per ADS Data | |||||||||||||||||||||||
| For the Three-Month Period Ended | For the Six-Month Period Ended | ||||||||||||||||||||||
| June 30, 2018 | June 30, 2018 | ||||||||||||||||||||||
| US$ | NT$ | % | US$ | NT$ | % | ||||||||||||||||||
| Net operating revenues | 1,275 | 38,852 | 100.0% | 2,505 | 76,349 | 100.0% | |||||||||||||||||
| Operating costs | (1,056) | (32,177) | (82.8%) | (2,134) | (65,032) | (85.2%) | |||||||||||||||||
| Gross profit | 219 | 6,675 | 17.2% | 371 | 11,317 | 14.8% | |||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| - Sales and marketing expenses | (36) | (1,103) | (2.8%) | (66) | (2,012) | (2.6%) | |||||||||||||||||
| - General and administrative expenses | (36) | (1,083) | (2.8%) | (69) | (2,099) | (2.8%) | |||||||||||||||||
| - Research and development expenses | (99) | (3,027) | (7.8%) | (195) | (5,951) | (7.8%) | |||||||||||||||||
| Subtotal | (171) | (5,213) | (13.4%) | (330) | (10,062) | (13.2%) | |||||||||||||||||
| Net other operating income and expenses | 56 | 1,719 | 4.4% | 89 | 2,696 | 3.6% | |||||||||||||||||
| Operating income | 104 | 3,181 | 8.2% | 130 | 3,951 | 5.2% | |||||||||||||||||
| Net non-operating income and expenses | (36) | (1,095) | (2.8%) | (1) | (8) | (0.0%) | |||||||||||||||||
|
Income from continuing operations before
income tax |
68 | 2,086 | 5.4% | 129 | 3,943 | 5.2% | |||||||||||||||||
| Income tax benefit | 11 | 331 | 0.8% | 50 | 1,503 | 1.9% | |||||||||||||||||
| Net income | 79 | 2,417 | 6.2% | 179 | 5,446 | 7.1% | |||||||||||||||||
| Other comprehensive income (loss) | 87 | 2,641 | 6.8% | 79 | 2,408 | 3.2% | |||||||||||||||||
| Total comprehensive income (loss) | 166 | 5,058 | 13.0% | 258 | 7,854 | 10.3% | |||||||||||||||||
| Net income attributable to: | |||||||||||||||||||||||
| Stockholders of the parent | 120 | 3,659 | 9.4% | 232 | 7,059 | 9.2% | |||||||||||||||||
| Non-controlling interests | (41) | (1,242) | (3.2%) | (53) | (1,613) | (2.1%) | |||||||||||||||||
| Comprehensive income (loss) attributable to: | |||||||||||||||||||||||
| Stockholders of the parent | 207 | 6,297 | 16.2% | 310 | 9,456 | 12.4% | |||||||||||||||||
| Non-controlling interests | (41) | (1,239) | (3.2%) | (52) | (1,602) | (2.1%) | |||||||||||||||||
| Earnings per share-basic | 0.010 | 0.30 | 0.019 | 0.58 | |||||||||||||||||||
| Earnings per ADS (2) | 0.049 | 1.50 | 0.095 | 2.90 | |||||||||||||||||||
|
Weighted average number of shares outstanding (in millions) |
12,049 | 12,125 | |||||||||||||||||||||
| Notes: | |||||||||||||||||||||||
| (1) New Taiwan Dollars have been translated into U.S. Dollars at the June 30, 2018 exchange rate of NT $30.48 per U.S. Dollar. | |||||||||||||||||||||||
| (2) 1 ADS equals 5 common shares. | |||||||||||||||||||||||
| UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES | ||||||||||||
| Consolidated Condensed Statement of Cash Flows | ||||||||||||
| For The Six-Month Period Ended June 30, 2018 | ||||||||||||
| Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$) | ||||||||||||
| US$ | NT$ | |||||||||||
| Cash flows from operating activities : | ||||||||||||
| Net income before tax | 129 | 3,943 | ||||||||||
| Depreciation & Amortization | 875 | 26,662 | ||||||||||
| Changes in notes & accounts receivable | (157) | (4,774) | ||||||||||
| Changes in other current assets | 37 | 1,136 | ||||||||||
| Changes in contract liabilities | (61) | (1,846) | ||||||||||
| Changes in assets, liabilities and others | (67) | (2,080) | ||||||||||
| Net cash provided by operating activities | 756 | 23,041 | ||||||||||
| Cash flows from investing activities : | ||||||||||||
| Acquisition of financial assets at fair value through profit or loss | (14) | (418) | ||||||||||
| Acquisition of investments accounted for under the equity method | (28) | (840) | ||||||||||
| Acquisition of property, plant and equipment | (316) | (9,617) | ||||||||||
| Increase in refundable deposits | (30) | (920) | ||||||||||
| Others | 210 | 6,384 | ||||||||||
| Net cash used in investing activities | (178) | (5,411) | ||||||||||
| Cash flows from financing activities : | ||||||||||||
| Decrease in short-term loans | (458) | (13,965) | ||||||||||
| Redemption of bonds | (246) | (7,500) | ||||||||||
| Treasury stock acquired | (103) | (3,129) | ||||||||||
| Others | 3 | 85 | ||||||||||
| Net cash used in financing activities | (804) | (24,509) | ||||||||||
| Effect of exchange rate changes on cash and cash equivalents | 13 | 397 | ||||||||||
| Net decrease in cash and cash equivalents | (213) | (6,482) | ||||||||||
| Cash and cash equivalents at beginning of period | 2,680 | 81,675 | ||||||||||
| Cash and cash equivalents at end of period | 2,467 | 75,193 | ||||||||||
| Note: New Taiwan Dollars have been translated into U.S. Dollars at the June 30, 2018 exchange rate of NT $30.48 per U.S. Dollar. | ||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20180725005300/en/
UMC
Investor Relations
Michael Lin / David Wong,
+ 886-2-2658-9168, ext. 16900
[email protected]
[email protected]
Source: United Microelectronics Corporation