GlobalWafers (6488) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was NT$15.3 billion, up 1.6% sequentially but down 14.4% year-over-year; H1 2024 revenue was NT$30.4 billion, down 16.7% YoY, reflecting ongoing semiconductor demand contraction.

• Net profit for Q2 2024 was NT$2.88 billion, down 18.5% QoQ and 39.9% YoY; H1 2024 net profit was NT$6.41 billion, down 34.5% YoY; EPS for H1 was NT$14.04.

• Major global expansion projects in the US and Italy secured up to $400 million and €103 million in government subsidies, supporting advanced wafer production and supply chain resilience.

• A magnitude 7.2 earthquake in Taiwan and a June 2024 cyberattack disrupted operations but were managed with minimal long-term impact due to strong risk management.

• ESG initiatives advanced, including top 5% corporate governance ranking in Taiwan, increased board diversity, and environmental achievements.

Financial highlights

• Q2 2024 gross margin was 32.3%, operating income margin 22%, and net profit margin 18.8%; H1 2024 gross margin was 33.3%, operating income margin 24.1%, and net profit margin 21.1%.

• Q2 2024 EBITDA was NT$4.6 billion (30.0% margin); H1 2024 basic EPS was NT$14.04.

• Cash and cash equivalents at Q2 2024 were NT$44.18 billion, up from NT$26.16 billion at year-end 2023.

• CapEx for H1 2024 reached NT$23.1 billion, with NT$54.46 billion in construction-in-progress as of June 30, 2024.

• Short-term loans and new bond issuances increased to support expansion, with NT$12.10 billion in new borrowings and NT$16.90 billion in bonds in H1 2024.

Outlook and guidance

• Semiconductor industry is expected to recover in H2 2024, with a U-shaped recovery and positive momentum into 2025 as inventory levels normalize.

• 2024 revenue is projected to be lower than 2023, with a high single-digit decrease YoY.

• Gross margin is expected to gradually improve from 2025 as government subsidies reduce depreciation.

• Market share in advanced logic is expected to improve by end of 2025 as new capacity comes online.

• New IFRS 18 standards will impact financial statement presentation from 2027.