Delta Electronics (2308) Q2 2024 earnings summary

Executive summary

• Q2/2Q24 revenue reached TWD/NT$103.4 billion, up 3% year-on-year and 13% sequentially, with gross profit up 20% year-on-year and 31% quarter-on-quarter due to a favorable product mix.

• Operating profit in Q2/2Q24 rose 28% year-on-year and 78% quarter-on-quarter to NT$13.1 billion, with OP margin at 12.7% versus 8.1% in Q1.

• Net profit after tax for Q2/2Q24 was TWD/NT$9.9 billion, up 22% year-on-year and 73% from Q1; Q2 EPS was 3.83.

• First half/1H24 revenue was TWD/NT$194.7 billion, up 1% year-on-year, with EPS at 6.05, up 4% year-on-year.

• Net income attributable to owners for the six months was NT$15.7 billion, up from NT$15.1 billion year-over-year.

Financial highlights

• Q2/2Q24 gross margin improved to 34.1% from 29.2% a year ago and 29.5% in Q1; 1H24 gross margin was 32.0% (up from 28.4%).

• Q2/2Q24 EBITDA was TWD/NT$21.7 billion, up 24% year-on-year and 45% quarter-on-quarter; EBITDA margin: 20.9%.

• 1H24 EBITDA was NT$36.6 billion, up 12% year-on-year; EBITDA margin: 18.8%.

• Cash and cash equivalents as of June 30, 2024 were NT$105.6 billion, up from NT$75.4 billion a year earlier.

• Net cash from operating activities for the six months was NT$31.9 billion.

Outlook and guidance

• Management expects the second half to be better than the first, in line with typical seasonality.

• Macroeconomic outlook remains cautious, with global growth expected to be benign and China’s recovery still uncertain.

• AI server power business expected to remain steady; mass shipment of liquid cooling products to start in Q3, but adoption rates remain uncertain.

• The group continues to invest in R&D and expand capacity, with significant capital expenditures contracted for property, plant, and equipment.

• Management remains focused on energy-efficient solutions and global expansion, with ongoing monitoring of regulatory changes such as Pillar Two income taxes.