UMC Reports Fourth Quarter 2012 Results<2303.TW>
* Reuters is not responsible for the content in this press release.
For best results when printing this announcement, please click on the link below: http://pdf.reuters.com/pdfnews/pdfnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com:20130206:nPnHK55313 Company to enhance advanced processes and long-term competitiveness TAIPEI, Taiwan, Feb. 6, 2013 /PRNewswire/ -- Fourth Quarter 2012 Overview[Note 1]: * Revenue: declined 8.5% QoQ to NT$26.09 billion (US$898.66 million) * Gross margin: 16.8%; operating margin: 3.7% * Capacity utilization: 80% * Net income: NT$1.17 billion (US$40.41 million) * Earnings per share: NT$0.09; earnings per ADS: US$0.016 Note 1: Unless otherwise stated, all financial figures discussed in this announcement are prepared in accordance with ROC GAAP, which differ in some material respects from generally accepted accounting principles in the United States. They are un-audited, unconsolidated, and represent comparisons among the three-month period ending Dec 31, 2012, the three-month period ending Sep 30, 2012, and the equivalent three-month period that ended Dec 31, 2011. For all 4Q12 results, New Taiwan Dollar (NT$) amounts have been converted into U.S. Dollars at the Dec 31, 2012 exchange rate of NT$29.03 per U.S. Dollar. United Microelectronics Corporation (NYSE: UMC; TWSE: 2303) ("UMC" or "The Company"), a leading global semiconductor foundry, today announced its unconsolidated operating results for the fourth quarter of 2012. Revenue was NT$26.09 billion, an 8.5% quarter-over-quarter decrease from NT$28.53 billion in 3Q12, and a 6.8% year-over-year increase from NT$24.43 billion in 4Q11. Gross margin was 16.8%, operating margin was 3.7%, net income was NT$1.17 billion, and earnings per ordinary share were NT$ 0.09. In 2012, revenue for the full year was NT$106.00 billion, with NT$9.08 billion operating income, NT$7.92 billion net income and NT$0.63 earnings per share. Mr. Po-Wen Yen, UMC's newly appointed CEO, said, "In 4Q 2012, both UMC's revenue and gross profit were in line with expectations. Quarter-over-quarter revenue decline was primarily attributed to decreased wafer shipments. A total of 1.07 million 8-inch equivalent wafers were shipped, with overall capacity utilization at 80%. Due to the impact from declining wafers shipments and currency appreciation, gross margin for the quarter was 16.8%. Revenue contribution from 40nm continued its sequential increase to 15%, reaching our internal target." CEO Yen continued, "As industry competition intensifies, the bar has been raised with regard to customer expectations for leading-edge technology products' time to market and foundry service flexibility. As UMC's newly appointed CEO, my first priority is to enhance R&D for advanced processes. In order to realize maximum benefits from our R&D efforts, we will increase internal resources while leverage outside collaboration so that we may effectively integrate R&D with manufacturing to ensure timely delivery of key projects. For example, UMC's FinFET development began in 2010, and was bolstered in 2012 through a cooperative licensing agreement with IBM for their fundamental FinFET technology. Our FinFET development team has since been making good progress. Meanwhile, UMC recently demonstrated the world's first TSV-enabled 3DIC chip stacking technology developed under an open ecosystem collaboration. The 3DIC, developed with an OSAT partner, reached a major milestone by passing package-level reliability assessment. This successful collaboration reaffirms our strong commitment to elevating technology capabilities in order to fulfill the promise of providing high value-added services to customers. UMC's operating results can be further enhanced through management's team effort to increase capacity, control cost, and expand our customer base. Although UMC's 28nm ramp has been slower than anticipated, we remain dedicated to advanced technology development and timely capacity deployment to serve our customers' needs. Equally important is our customers' unwavering commitment to bringing their new and existing 28nm products to fruition at UMC." CEO Yen added, "In the short-term, we continue to see elevated demand uncertainty from customers, along with supply chain inventory that will need additional time to digest. When demand recovers, we are optimistic about the growth momentum from the strong mobile communications segment. 2013 is a critical year for UMC to demonstrate continuous success. In addition to acquiring Hejian Technology's operation, which will help UMC expand in the China market and broaden the company's operating scale, we will continue to invest appropriate capex to further our advanced process R&D and expand leading-edge capacity. These endeavors will help expedite company growth and strengthen competitiveness to enhance UMC and its customers' overall value while increasing shareholders' equity." Summary of Operating Results Operating Results (Amount: NT$ million) 4Q12 3Q12 QoQ % 4Q11 YoY % change change Revenue 26,088 28,525 (8.5) 24,425 6.8 Gross Profit 4,372 6,850 (36.2) 4,550 (3.9) Operating Expenses (3,409) (3,238) 5.3 (3,710) (8.1) Operating Income 963 3,612 (73.3) 840 14.6 Non-Operating Income 391 83 371.1 149 162.4 Net Income 1,173 2,417 (51.5) 980 19.7 EPS (NT$ per share) 0.09 0.19 0.08 (US$ per ADS[Note 2]) 0.016 0.033 0.014 Note 2: One ADS represents five Taiwan-listed ordinary shares. Revenue decreased 8.5% QoQ to NT$26.09 billion from NT$28.53 billion in 3Q12, and increased 6.8% YoY from NT$24.43 billion in 4Q11. Gross profit was NT$4.37 billion, or 16.8% of revenue, compared to NT$6.85 billion, or 24.0% of 3Q12 revenue. Operating income for the quarter was NT$963 million, or 3.7% of revenue, compared to NT$3.61 billion, or 12.7% of 3Q12 revenue. Net income in 4Q12 was NT$1.17 billion, compared to NT$2.42 billion in 3Q12. Earnings per ordinary share for the quarter were NT$0.09. Earnings per ADS were US$0.016. The basic weighted average number of outstanding shares in 4Q12 was 12,635,635,936, compared with 12,628,658,938 shares in 3Q12 and 12,609,375,064 shares in 4Q11. The diluted weighted average number of outstanding shares was 13,321,721,668 in 4Q12, compared with 13,309,367,195 shares in 3Q12 and 13,319,535,653 shares in 4Q11. The fully diluted share count on December 31, 2012 was approximately 14,062,286,000. On December 31, 2012, UMC held 300 million treasury shares acquired from the 14th share buy-back programs. Detailed Financials Section Revenue decreased 8.5% QoQ to NT$26.09 billion from NT$28.53 billion in 3Q12, mainly due to decrease in shipment quantity. Gross profit was NT$4.37 billion, or 16.8% of revenue, compared to NT$6.85 billion, or 24.0% of 3Q12 revenue due to shipment decline and currency appreciation. Sales and Marketing expenses decreased to NT$323 million due to a reversal of bad debt expenses from customers. Research and development expenses increased to NT$2.49 billion in 4Q, mainly due to the increase in R&D wafers and masks for advanced process nodes. The total R&D expense was 9.5% of revenue in 4Q12. COGS & Expenses (Amount: NT$ million) 4Q12 3Q12 QoQ % 4Q11 YoY % change change Revenue 26,088 28,525 (8.5) 24,425 6.8 COGS (21,716) (21,675) 0.2 (19,875) 9.3 Depreciation (6,841) (7,122) (3.9) (6,800) 0.6 Other Mfg. Costs (14,875) (14,553) 2.2 (13,075) 13.8 Gross Profit 4,372 6,850 (36.2) 4,550 (3.9) Gross Margin (%) 16.8% 24.0% 18.6% Total Operating Exp. (3,409) (3,238) 5.3 (3,710) (8.1) G&A (598) (515) 16.1 (601) (0.5) Sales & Marketing (323) (504) (35.9) (822) (60.7) R&D (2,488) (2,219) 12.1 (2,287) 8.8 Operating Income 963 3,612 (73.3) 840 14.6 Net non-operating income during 4Q12 increased QoQ to NT$391 million. Net investment loss was NT$1.04 billion, losses were primarily due to UMC Japan and solar business operations. Gain on disposal of investment mainly came from conversion of Novatek exchangeable bonds. The gain from other items mainly composed of gain on redemption of bonds payable and loss from valuation of financial liabilities. Non-Operating Income (Expenses) (Amount: NT$ million) 4Q12 3Q12 4Q11 Net Non-Operating Income 391 83 149 Net Interest Income (Loss) (54) (37) (7) Net Investment Loss (1,041) (1,068) (1,485) Gain (Loss) on Disposal of Investment 1,493 1,544 2 Exchange Gain (Loss) (60) (0) 45 Other Gain (Loss) 53 (356) 1,594 Operating cash inflow was NT$11.60 billion. Free cash flow for 4Q12 was negative NT$544 million, as CAPEX spending for the quarter was NT$12.14 billion. The NT$466 million of financing cash inflow was mainly from the increase of bank loans. Net cash outflow was NT$293 million in 4Q12. Cash Flow Summary (Amount: NT$ million) For the 3-Month Period For the 3-Month Period Ended Dec. 31, 2012 Ended Sep. 30, 2012 Cash Flow from Operations 11,599 10,184 Net Income 1,173 2,417 Depreciation & Amortization 8,791 8,605 Changes in Working Capital 881 (1,920) Other 754 1,082 Cash Flow from Investing (12,170) (9,138) Capital Expenditures (12,143) (11,692) Liquid of Investment 14 674 Other (41) 1,880 Cash Flow from Financing 466 (5,247) Bank Loans 571 904 Bonds Issued - (4) Cash Dividends - (6,316) Reacquisition of ECB (139) - Other 34 169 Effect of Exchange Rate (188) (314) Net Cash Flow (293) (4,515) Current assets decreased to NT$65.22 billion, mainly due to decrease in financial assets resulting from exchangeable bond holders exercising their exchange rights. The three-day increase from inventory turnover days resulted from higher raw material levels from increasing customers' demand at leading-edge nodes. Current Assets (Amount: NT$ billion) 4Q12 3Q12 4Q11 Cash & Cash Equivalents 31.76 32.05 30.83 Notes & Accounts Receivable 14.11 15.90 12.50 Days Sales Outstanding 52 51 49 Inventories 11.85 11.36 10.48 Avg. Inventory Turnover 50 47 51 Total Current Assets 65.22 68.31 60.77 Total current liabilities decreased to NT$29.27 billion in 4Q12, attributed to the payment on equipment, which consequently resulted in a drop in debt to equity ratio to 31% in 4Q. Liabilities (Amount: NT$ billion) 4Q12 3Q12 4Q11 Total Current Liabilities 29.27 35.07 31.75 Accounts Payable 4.98 5.25 4.00 Short-Term Credit / Bonds 8.15 9.30 10.43 Payable on Equipment 4.13 8.76 6.72 Other 12.01 11.76 10.60 Long-Term Liabilities 28.89 28.37 15.20 Total Liabilities 61.79 67.02 50.56 Debt to Equity 31% 33% 24% Analysis of Revenue[Note 3] Note 3: Revenue in this section represents wafer sales. The percentage of revenue from Asia Pacific increased to 45%, reflecting the relative strength of Asia Pacific based consumer and communication customers. Revenue Breakdown by Region Region 4Q12 3Q12 2Q12 1Q12 4Q11 North America 45% 50% 45% 45% 47% Asia Pacific 45% 40% 46% 46% 43% Europe 9% 9% 8% 8% 9% Japan 1% 1% 1% 1% 1% Revenue contribution from 40nm and below grew from 13% in 3Q12 to 15% in 4Q12, reaching the company's year-end internal target. Revenue Breakdown by Geometry Geometry 4Q12 3Q12 2Q12 1Q12 4Q11 40nm and below 15% 13% 9% 9% 8% 40nm
- North Korea's 'reign of terror' worries South's leader
- Google bus blocked in San Francisco gentrification protest
- Chinese hackers spied on Europeans before G20 meeting: researcher
- Putin dissolves state news agency, tightens grip on Russia media
- Los Angeles sheriff's officials charged in jail misconduct probe