Release Date:05/07/2018

Innolux Corporation Q1 2018 EPS NT$0.3 NT$0.8 Cash Dividend per Share for FY2017

 Innolux Corporation (3481.TW) Board of Directors today decided to distribute a NT$0.8 cash dividend per common share, a new high since merger. Innolux Corporation (3481.TW) also announced its 1Q 2018 consolidated revenue of NT$ 66.8 billion, operating profit of NT$ 3.8 billion, net profit of NT$ 2.9 billion, and a basic EPS of NT$ 0.3. In finance, the company’s total debt of NT$22.8 billion, net debt to equity ratio of -16%, depreciation & amortization of NT$ 9.2 billion and capital expenditure of NT$ 10.9 billion. The FY2018 forecast for depreciation and amortization and CAPEX is NT$34 billion and NT$55 billion respectively.
In the first quarter 2018, the company shipped 6.54 million square meters, a decrease of 15.2% over the previous quarter. Blended area ASP for TFT-LCD panels averaged US$ 338 per square meter. Small and medium-sized panel revenue of NT$ 16.7 billion in the first quarter 2018, a decrease of 12.6% over the previous quarter. The company shipped 625.8 thousand square meter area of small and medium-sized during the first quarter 2018, a decrease of 7.5% over the previous quarter.     
In terms of product application, Mobile & CP, Mobile PC, Desktop, TV panels accounted for 31%, 16%, 12% and 41% of our net sales, respectively. In terms of product size, 10-inch and below, 10-to-20-inch, 20-to-30-inch, 30-to-40-inch, 40-inch-and -above panels accounted for 27%, 21%, 15%, 3,and 34% of our net sales, respectively.
The QoQ decline in revenues and net income was owing to drop of panel price, unfavorable appreciation of New Taiwan Dollar and decrease of working days during Chinese New Year. Innolux managed profitable in Q1 with EPS NT$0.3. The net debt ratio kept declining QoQ to maintain a healthy financial condition.
Second quarter is the traditional low season for large-size panels and shipment may decline slightly. The days in inventory of large-size panel stayed above-average in Q1 and is expected to improve in Q2. TV set delivery is anticipated to reach 100K/month and will further lift with the brand promotion in the latter half year. Demand for small and medium size panel is expected to bounce after Q1. The smooth transition from 16:9 to 18:9 in mobile phone panel will bring up the shipment QoQ. Other than the exploration of new technology, Innolux takes the lead in AM Mini LED development and will disclose more details to the public when appropriate.
Based on our current business outlook, the Company expects its 2Q18 guidance as follows:

  1. Large panel
    1. Shipments to be down mid single digit % QoQ
    2. Blended ASP to be down high single digit % QoQ
  2. Small & Medium panel
    1. Shipments to be down low single digit % QoQ
    2. Blended ASP to be up low single digit % QoQ
Table 1: Statements of Comprehensive Income
                                                                                                                                      Units: NTD million except per share data
  1Q 2018 4Q 2017 QoQ% 1Q 2017
Net Sales 66,763 100.0% 79,132 100.0% -15.6% 86,026 100.0%
  Cost of Goods Sold 57,713 86.4% 67,949 85.9% -15.1% 65,681 76.4%
Gross Profit 9,051 13.6% 11,183 14.1% -19.1% 20,345 23.6%
Operating Expenses 5,222 7.8% 5,512 7.0% -5.3% 5,713 6.6%
Operating Income 3,829 5.7% 5,672 7.2% -32.5% 14,632 17.0%
Net Non-operating Income(Exp.) 91 0.1% 55 0.1% 65.1% 722 0.8%
Income before Tax 3,920 5.9% 5,727 7.2% -31.6% 15,354 17.8%
Net Income 2,940 4.4% 4,295 5.4% -31.6% 11,858 13.8%
  Basic EPS (1)(2) 0.30   0.43     1.19  
EBITDA(3) 13,040 19.5% 14,243 18.0% -8.4% 23,108 26.9%
1. Basic EPS = Net Income-Parent / Weighted Average of Outstanding Common Shares
2. Capital Stock (common): NT$99.5 billion as of March 31, 2018
3. EBITDA = Operation Income + Depreciation & Amortization
4. All figures are unaudited, prepared by INX in accordance with the International Financial Reporting Standards as endorsed in R.O.C. (TIFRS).
5.Combined figures presented refer to results from other TFT-LCD related subsidiaries in which INX has 50% or more ownership. Inter-company transactions between INX and these companies have been eliminated to avoid double-counting.

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