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 including a NT$475 million power outage loss; EPS at NT$-0.48.

• Gross margin was 3.2%, operating margin -30.8%, and EBITDA for Q3 was NT$1,520 million (18.7% margin).

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

• Power outage in Q3 led to a one-time loss of NT$475 million, impacting profit and wafer production.

• ASP increased by mid-single digits, but shipment volume declined by low twenties percent.

Financial highlights

• Operating revenue for the nine months ended September 30, 2024 was NT$27,556,573 thousand, up from NT$21,188,328 thousand year-over-year.

• Net loss for the nine months ended September 30, 2024 was NT$3,509,663 thousand, compared to NT$4,960,132 thousand for the same period in 2023.

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

• Operating expenses rose to NT$2.769 billion in Q3, mainly due to a NT$140 million increase in R&D.

• Cash and cash equivalents increased to NT$61,157,437 thousand as of September 30, 2024.

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% YoY from >20%.

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

• Utilization rates remain near 100% as capacity shifts to DDR5.

• Adoption of new IFRS standards is not expected to have a significant impact.