Nanya Technology (2408) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales reached NT$9,921 million, up 4.4% quarter-over-quarter and 41.2% year-over-year, driven by higher ASPs despite lower bit shipments.

• Net loss was NT$813 million, including NT$657 million in earthquake-related losses; EPS at NT$-0.26, showing improvement over the previous quarter.

• Gross margin improved to 2.9% from -2.9% in Q1 2024, with gross profit turning positive at NT$287 million.

• Operating loss narrowed to NT$2,319 million from NT$2,918 million in Q1 2024, with operating margin at -23.4% (up 7.3 ppt QoQ).

• Achieved platinum AWS certification, ranked top 5% in corporate governance, and released first TNFD-TCFD integrated report.

Financial highlights

• EBITDA for Q2 2024 was NT$1,734 million (17.5% margin), up 50.1% QoQ and 161.7% YoY.

• Net operating income was NT$1,047 million, partially offsetting operating losses.

• Book value per share stood at NT$54.14 at quarter end.

• SG&A expenses were NT$608 million and R&D expenses NT$1,998 million, both within normal ranges.

• Free cash flow was NT$-2,940 million in Q2 2024, impacted by increased receivables and inventories.

Outlook and guidance

• 2024 bit shipment expected to increase more than 20% YoY, mainly due to a low base in 2023.

• Plans to ship second-generation 10nm-class (1B) 8Gb DDR4 and 16Gb DDR5 products in H2 2024.

• HBM/DDR5 and AI/PC/phone launches expected to drive DRAM demand in H2 2024; major suppliers' HBM focus aids inventory adjustment.

• CapEx for 2024 is NT$26 billion, with 50% allocated to equipment and 50% to construction and other uses.

• Depreciation is expected to decrease significantly from 2025 as older equipment becomes fully depreciated.