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Release Date:05/05/2020

Innolux Corporation Reports First Quarter 2020 Financial Results

Innolux Corporation (3481.TW) announced its 1Q 2020 consolidated revenues of NT$ 50.4 billion, operating loss of NT$ 6.2billion, net loss of NT$ 5.3 billion, and a basic EPS of NT$ -0.55, depreciation & amortization of NT$ 8.8 billion and capital expenditure of NT$ 6.5 billion.
 
In 1Q20, the Company shipped 5.91 million square meters of total panel, a decrease of 22.5% quarter-on-quarter. Blended area ASP for TFT-LCD panels averaged US$ 278 per square meter. Small and medium-sized panel revenues were NT$ 13.2 billion in 1Q20, a decrease of 25.4% quarter-on-quarter. The Company shipped 583.2 thousand square meters of small and medium-sized panel during the first quarter of 2020, a decrease of 23.8% quarter-on-quarter.
 
In 1Q20, in terms of product application, Mobile & CP, Mobile PC, Desktop, TV panels accounted for 34%, 21%, 9% and 36% of 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%, 26%, 12%, 5%, and 30% of net sales, respectively.
 
Looking back to 1Q20, the delayed resumption of work in Mainland China due to Covid-19 led to a decline in the utilization rate of mainland module factories and revenues declined by 23.2% QoQ. EBITDA margin maintained at 5.1%. The Company will continue to invest in technology update and cost improvement.
 
Entering into 2Q20, owing to the outbreak of coronavirus disease has held back the global economy, and the postponement of UEFA EURO 2020 and Olympic Games Tokyo lowered the demand of TV panel. However, the expected path toward resuming normal operating globally in 2H20 and Korean manufactures quit LCD panel business, the demand of TV panel is expected to recover gradually quarter by quarter. In 2Q20, the demand of IT panel is expected to be robust based on the increasing demand of notebook and monitor products for work-from-home and distance learning. For Smartphone, the expected 5G infrastructure deployment and the traditional peak season in the second half of the year will stabilize the demand for small and medium-sized panels quarter by quarter.
 
Although the uncertainty of global economic situation has been increasing since this year due to coronavirus disease, the Company will strengthen its competitiveness and stability by enhancing the value of product, innovating new technology, and maintaining financial discipline.
 
Based on our current business outlook, the Company expects its 2Q20 guidance as follows:
Large panel
   Shipments to be significant increase QoQ
   Blended ASP to be down low single digit % QoQ
Small & Medium panel
   Shipments to be up mid teens % QoQ
   Blended ASP to be flat % QoQ
 

Table 1: Statements of Comprehensive Income
Units: NTD million except per share data
  1Q 2020 4Q 2019 QoQ% 1Q 2019
Net Sales 50,392 100.0% 65,578 100.0% -23.2% 59,924 100.0%
  Cost of Goods Sold 51,286 101.8% 66,960 102.1% -23.4% 59,049 98.5%
Gross Profit (894) -1.8% (1,382) -2.1% -35.3% 875 1.5%
Operating Expenses 5,320 10.6% 5,751 8.8% -7.5% -5,483 -9.1%
Operating Profit(Loss) (6,215) -12.3% (7,132) -10.9% -12.9% (4,607) -7.7%
Net Non-operating Income(Exp.) 1,254 2.5% 460 0.7% 172.9% 976 1.6%
Profit(Loss) before Tax (4,960) -9.8% (6,673) -10.2% -25.7% (3,632) -6.1%
Net Profit(Loss) (5,264) -10.4% (6,859) -10.5% -23.3% (3,725) -6.2%
Net Profit Attributable to Owners of Company (5,269) -10.5% (6,859) -10.5% -23.2% (3,725) -6.2%
  Basic EPS (1)(2) (0.55)   (0.71)     (0.37)  
EBITDA(3) 2,571 5.1% 1,525 2.3% 68.6% 4,170 7.0%
 
Notes:
1. Basic EPS = Net Income-Parent / Weighted Average of Outstanding Common Shares
2. Capital Stock (common): NT$97.1 billion as of March 31, 2020
3. EBITDA = Operation Income + Depreciation & Amortization
4. All figures are prepared by Innolux Corporation in accordance with the International Financial Reporting Standards as endorsed in TIFRS.

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