Advantech (2395) Q2 2024 earnings summary

Executive summary

• Consolidated operating revenue for the six months ended June 30, 2024, was NT$28.52 billion, down 17% year-over-year; net profit after tax was NT$4.11 billion, down 31% year-over-year.

• Q2 2024 revenue was NT$14.64 billion, a 14% decrease year-over-year, with net profit after tax of NT$2.11 billion, down 30% year-over-year.

• Sequentially, Q2 revenue and profits showed single-digit growth over Q1, indicating gradual operational recovery.

• Taiwan market grew 12% year-over-year, while other regions saw double-digit declines; all business units posted double-digit declines year-over-year.

• Declines attributed to geopolitical issues and high inflation, leading to global demand slowdown.

Financial highlights

• Six-month gross profit was NT$11.48 billion (gross margin 40.2%), operating profit NT$4.08 billion (operating margin 14.3%).

• Q2 gross profit was NT$5.93 billion (gross margin 40.5%), operating profit NT$2.17 billion (operating margin 14.8%).

• Basic EPS for six months was NT$4.78; Q2 EPS was NT$2.46.

• Cash and cash equivalents at June 30, 2024, were NT$13.89 billion, up from NT$11.60 billion a year earlier.

• Net cash provided by operating activities for six months was NT$3.42 billion.

Outlook and guidance

• Management notes a gradual resurgence in operational performance, with sequential improvement in Q2.

• Ongoing challenges from global geopolitical tensions and inflation are expected to continue impacting demand.