Nanya Technology (2408) Q3 2024 earnings summary

Executive summary

• Q3 2024 net sales were NT$8,133 million, down 18% quarter-over-quarter but up 5.1% year-over-year, with a net loss of NT$1,487 million and EPS at NT$-0.48, impacted by a NT$475 million power outage loss.

• Gross margin was 3.2% and operating margin -30.8% in Q3 2024; EBITDA was NT$1,520 million.

• Book value per share stood at NT$53.17 at quarter-end.

• For the nine months ended September 30, 2024, revenue was NT$27,556,573 thousand, up from NT$21,188,328 thousand year-over-year, and net loss narrowed to NT$3,509,663 thousand.

• Gross margin for the nine months improved to 1% from -16% year-over-year.

Financial highlights

• Revenue declined 18% quarter-over-quarter in Q3 due to a low-twenties percent decrease in bit shipment, partially offset by a mid-single digit ASP increase.

• Operating expenses rose to NT$2,769 million in Q3, mainly from a NT$140 million increase in R&D.

• Free cash flow for Q3 was negative NT$7,459 million; net cash and equivalents at quarter-end were NT$38.2 billion.

• Cash and cash equivalents at September 30, 2024 were NT$61,157,437 thousand.

• Interest income for the nine months was NT$2,556,856 thousand.

Outlook and guidance

• 2024 CAPEX guidance reduced to NT$20 billion from NT$26 billion; WFE CAPEX to account for ~50%.

• Bit shipment growth target for 2024 revised down to ~10% year-over-year from >20%.

• Q4 ASP expected to remain challenging, with significant DDR5 contribution and ASP improvement anticipated in Q1 2025.

• Management expects adoption of new IFRS standards in 2025 and 2027 to have no significant impact.

• No earnings distribution for 2023 due to deficit; dividend policy remains aligned with capital-intensive industry needs.