GlobalWafers (6488) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached NT$18.9 billion, up 3.6% sequentially, but first three quarters revenue declined 14.1% year-over-year to NT$46.3 billion.

• Net profit for Q3 2024 was NT$2.95 billion, a 2.6% increase from Q2 2024 but a 46.7% decline year-over-year.

• EPS for Q3 2024 was NT$6.18; cumulative EPS for the first three quarters was NT$20.19.

• Gross margin and operating margin declined both sequentially and year-over-year due to higher electricity and power costs, increased depreciation, lower silicon carbide volume and price, and product mix changes.

• The company completed a major capital increase and expanded its business through acquisitions and investments, including the integration of Crystalwise Technology Inc.

Financial highlights

• Q3 2024 gross margin was 30%, down from 32.3% in Q2 2024 and 36.6% in Q3 2023.

• Operating income for Q3 2024 was NT$3.2 billion, down 4.9% sequentially and 33.7% year-over-year.

• For the first three quarters, revenue was NT$46,282.7 million, down 14% year-over-year; net profit was NT$9,367.3 million, down 39%.

• Prepayment balance at end of September 2024 was NT$33.1 billion, down 6% from the previous quarter due to customer contract fulfillment and FX impact.

• Cash and cash equivalents increased to NT$41,728.2 million as of September 30, 2024, from NT$28,100.0 million a year earlier.

Outlook and guidance

• Q4 2024 revenue is expected to continue sequential growth, with a market recovery anticipated in 2025 as inventory normalizes and semiconductor demand improves.

• Gross margin is expected to bottom out in Q3 2024, with improvements anticipated from 2025 as revenue increases and government subsidies offset depreciation.

• 300mm wafer utilization expected to exceed 90% from 2025–2027, with near full saturation by 2027.

• Dividend payout policy will remain at 50–55% of distributable profit for the next several years.

• Full utilization of new US capacity is targeted by end of 2025 or early 2026, depending on market demand and qualification.