Delta Electronics (2308) Q3 2024 earnings summary

Executive summary

• Q3 operating profit rose 38% year-on-year and 25% quarter-on-quarter, with OP margin reaching a record 14.6% driven by gross profit expansion.

• Net profit after tax in Q3 was NT$12.4 billion, up 32% year-on-year and 24% from Q2, with EPS at NT$4.75.

• For the first three quarters, revenue was NT$306.95 billion, up 1.9% year-on-year, and net profit after tax was NT$28.05 billion, a 14.9% increase.

• Gross margin improved to 34.9% in Q3 and 32.7% for the nine months, up from 28.8% a year ago, driven by higher value-added product mix and operational efficiencies.

• EPS for the first three quarters was NT$10.80, up 15% year-on-year.

Financial highlights

• Q3 EBITDA reached NT$24.3 billion, up 24% year-on-year and 12% quarter-on-quarter, with EBITDA margin at 21.7%.

• Q3 pre-tax profit was NT$17.7 billion, up 28% year-on-year and 18% quarter-on-quarter.

• Cash and cash equivalents as of September 30, 2024 were NT$120.44 billion, up from NT$70.01 billion a year ago.

• Free cash flow from operations for the nine months was NT$51.19 billion, up from NT$46.66 billion year-over-year.

• Non-operating profit was NT$1.2 billion in Q3, down from Q2 and a year ago, impacted by lower investment gains and FX losses.

Outlook and guidance

• Q4 revenue expected to show year-on-year improvement, with business mix shifting: power and component businesses flat or slightly down, ICT business improving, and EV business stable.

• 2025 expected to see continued overall growth, with AI as a key driver; DC-DC converter revenue may drop, but power supply and ICT segments to grow.

• Management continues to focus on expanding high-margin solution businesses and expects ongoing growth in power electronics, mobility, automation, and infrastructure segments.

• Gross margin in Q4 subject to business mix and inventory/shipment dynamics.

• Expense growth projected at around 15% for the year, with next year's budget still being finalized.