Staying Resilient Amid Economic Uncertainty 1H 2020 Group Profitability Improved Year-on-Year
First Half of 2020
- Group revenue of US$991.6million improved by 5.9% over the same period last year and decreased by 10.5% compared to thesecond half of last year
- Group net profit of HK$390.8million increased 119.2% as compared with the first six-month period of last year; and decreased 12.0% compared to the second six-month period of last year
- Group earnings per share of HK$0.95for the first half of 2020
- Semiconductor Solutions Segmentrevenue of US$473.3 million increased 16.6% over the first six-month period oflast year and decreased 4.5% compared to the second six-month period of lastyear
- Materials Segment revenue ofUS$125.7 million improved 15.6% over the first six-month period of last yearand fell by 3.2% compared to the second half of last year
- SMT Solutions Segment revenueof US$392.6 million decreased 6.9% and 18.7% over the first six-month period and thesecond six-month period of last year, respectively
- 1H new Group order bookings of US$1.14 billion increased7.4% and 19.0% over the first and second six-month periods of last year,respectively
- Group order backlog was US$ 799.9 million as of 30 June 2020
- 1H Book-to-Bill Ratio was 1.15
Second Quarter of 2020
- Group revenue of US$ 557.4 million increased 27.8 % and 19.5% over the preceding quarter and the same periodlast year,respectively
- Group net profit of HK$365.4million increased 1,341.5% and 421.8% over the preceding quarter and the sameperiod last year, respectively
- Group earnings per share ofHK$0.89 for the second quarter 2020
- Group operating profits of HK$495.8million increased 241.1% and 95.8% over the preceding quarter and the sameperiod last year, respectively
- Semiconductor Solutions Segmentrevenue of US$279.0 million increased 43.0% and 33.8% over the preceding quarter and over the same period last year, respectively
- Materials Segment revenue ofUS$ 74.2 million increased 43.2% and 28.2% over the preceding quarter and over the same period last year, respectively
- SMT Solutions Segment revenueof US$204.2 million increased 8.0% and 2.2% over the preceding quarter andthe same period last year , respectively
- Q2 new Group order bookings of US$ 472.0 million decreased 29.4% and 21.6% over the precedingquarter and over the sameperiod last year, respectively.
- Cashand bank deposits of HK$3.59 billion as of 30 June 2020
ASMPT reported a revenue of US$991.6 million during first half this year(2019 1H: US$927.3 million) . The Group's consolidated profit aftertaxation for the period was HK$390.8 million (2019 1H: HK$178.3 million). Basic earnings per share for the period amounted to HK$0.95 (2019 1H:HK$0.44).
Groupbookings for the first half of the year amounted to US$1.14 billion,representing an increase of 7.4% compared to the first half of last year (YoY).The book-to-bill ratio for the first six months of this year came in at 1.15. The Group ended the first half with a Backlogof US$799.9 million.
Mr. Robin Ng, Chief Executive Officer of ASM PT , said, " We have navigated global macro-economic headwinds relatively well,but with t heCOVID-19 pandemic and ongoing geopolitical tensions continuing to bedisruptive, uncertainties remain. One thing is clear -- the rapidtransformation of global workforce and industry norms have added to overall trends that point toward a future increasingly in need of moredigital capabilities and features. These include: increased telecommuting use,a huge thirst for high performance computing & data centres, 5Ginfrastructure buildup, localization of China's semiconductor supply chain, and- across multiple industries - an increasingly wider and more complex range ofrequirements for digitally-driven capabilities. I am pleased that ASMPT is verywell placed to help meet these burgeoning requirements . "
ASMPT saw anincrease in revenue recorded from customers from the Mobility, Communicationsand Information Technology segments. Optoelectronics and Power Managementsegments also turned in a very strong revenue performance for the first half of2020 versus the first half 2019. Last but not least,Advanced Packaging also delivered excellent results for billing performance inthe first half of 2020 compared to the first half of 2019 .
In light of ongoingeconomic headwinds , the Group hadundertaken a series of Group-wide initiatives to control cost including a Group-widesalary freeze, tight headcount control and close monitoring on discretionaryspending. The Group's solid balance sheet provides the foundation to withstand thisperiod of economic uncertainty and beyond .
Withthe outbreak of COVID-19 in early part of this year, the Group formed a GroupBCP ("Business Continuity Plan") Committee to steer its global efforts in managingthe COVID-19 situation. The Committee's efforts have ensured that the Group is incompliance with local authorities' guidelines and restrictions while helping at the same time, as a responsible corporate citizen,the communities in which it operates fight the outbreak.
Inits principal manufacturing facilities in China, effectively 100% of employees havereturned to work after the lifting of various travel restrictions that had beenimposed since the extended Chinese New Year holiday period. The Group hasrecovered a big portion of lost capacity in Q1 through productivity improvementand working overtime.
Bythe middle of May 2020, its Malaysia factory had returned to full productionworkforce. The Singapore government gradually re-opened business from 2 June2020 and its workforce in Singapore continued to be on the alert to the evolving situation . In both locations, production capacity has been restored to normallevels. In countries in Europe and the USA where the Group has operations, there are various types of restrictions and stay-in-shelter orders . The Group managed to continue itsbusiness operations through a combination of flexible work arrangements.
Segment HighlightsDuring the secondquarter of this year, billings of the Semiconductor Solutions Segment amountedto US$279.0 million, representing increases of 43.0% and 33.8% for QoQ and YoYrespectively. Billings of the Semiconductor Solutions Segment for the first sixmonths of this year were US$473.3 million, representing an increase of 16.6%against the same period a year ago.
The Q2 segment billings strong YoYgrowth was underpinned by Advanced Packaging, Optoelectronics and IC/Discretesegments. CIS had experienced YoY decline mainly due to the soft demand forsmartphones and also the high base compared to the previous year. The advancedpackaging deposition tools for RDL (redistribution layer) and copper build-upapplications from NEXX had delivered strong billings growth compared to thesame period last year. The on-going market ramp for the High PerformanceComputing applications continue to drive the strong performance from NEXX.Other than NEXX, the traditional wire bonders and die bonders deliveredrelatively strong YoY Q2 revenue growth despite challenging businessenvironment.
Neworder bookings for the Semiconductor Solutions Segment in the second quarterwere US$226.9 million. For the first six monthsof this year, the Semiconductor Solutions Segment achieved new order bookingsof US$536.5 million, representing a significant increase of 14.2% comparing tothe same period last year. On the YoY basis, Q2 segment bookings saw a slight decrease of 8.1%,despite the confluence of the pandemic and trade war dampening the overallbusiness sentiment.
The Semiconductor Solutions Segmentachieved gross margins of 42.9% and 42.2% during the second quarter and thefirst half of this year, respectively, which represented improvements of 211 bpsand 219 bps YoY, respectively. The grossmargin for first half was driven mainly by higher volume effect, positiveresults from our productivity drive, product mix and continuous cost reductionsin our manufacturing operations .
Over the first six months of this year, bookings ofthe Materials Segment amounted to US$167.3 million. This was an improvement of 59.3%against the corresponding period of last year. The first half bookings forMaterials Segment was a record. Billings of the Materials Segment for thesix-month period amounted to US$125.7 million, representing an increase of 15.6%comparing to the same period a year ago.
The Materials Segment achieved gross margins of 16.9%and 13.5% during the second quarter and the first half of this year,respectively, representing improvements of 546 bps and 250 bps YoY respectively. The gross margin improvement of Materials Segment was underpinned by higher volume effect and discontinuationof the loss-making Molded Interconnect Substrate business in 2020.
During the six-month period, billings of the SMTSolutions Segment were US$392.6 million, representing a decrease of 6.9% YoY. The Segment gross margins of 31.3% and 31.8% during the secondquarter and the first half of this year respectively were impacted by thedecline in revenue for Automotive and Industrial applications market and the relativelylarger China customer base that the Group served this year compared to lastyear.
" The InternationalMonetary Fund revised their global full year 2020 growth projections downwardsduring their June 2020 review, from -3.0% to -4.9%. For the second half of2020, the threat of another wave of COVID-19 infections and continued falloutfrom worsening US-China tensions will remain major concerns globally. Weanticipate revenue for Q3 2020 to be in the range of US$480 million to US$560million which takes into account subdued demand for Automotive and weakness inEurozone demand.
Despite theseuncertainties, we expect continued demand from Chinese manufacturers tolocalize their supply chains, accelerated deployment of 5G infrastructure andgood progress the Group is making on capturing new market opportunities such asAdvanced Packaging, Silicon Photonics, Industrial Internet of Things, mini andmicro LED solutions, Power semiconductors and Industry 4.0 solutions to helpdeliver long term sustainable value to our shareholders . " Mr. Ng concluded.