Winbond Electronics (2344) H2 2024 earnings summary

Executive summary

• Net sales for 2024 reached NT$81,610 million, up 8.8% year-over-year, with net income of NT$710 million and EPS of NT$0.14, marking a significant turnaround from a net loss in 2023.

• 4Q24 saw net sales of NT$18,692 million, down 12.3% sequentially and 2.5% year-over-year, with a net loss of NT$678 million and negative EPS of NT$0.15.

• Comprehensive loss of NT$7.2 billion was driven by significant unrealized losses on financial assets at FVTOCI.

• Major product segments include Customized Memory Solutions, Flash Memory, and Logic IC, with Flash Memory contributing the largest share of profit.

• 2024 saw a return to profitability, but no dividend payout due to the comprehensive loss.

Financial highlights

• Gross margin for 2024 was 29%, down 1 ppt year-over-year; 4Q24 gross margin was 27.2%, down 2 ppts sequentially.

• Operating margin improved to 0.6% in 2024 from -2.2% in 2023; 4Q24 operating margin was -4.0%.

• Free cash flow improved to -NT$5,931 million in 2024 from -NT$10,186 million in 2023.

• Operating cash flow: NT$11.1 billion, up from NT$3.6 billion in 2023.

• Cash and cash equivalents at year-end were NT$14,100 million; total assets NT$177.8 billion; total equity NT$99.2 billion.

Outlook and guidance

• NOR Flash supply-demand expected to be balanced in 1H25, with mild demand growth in 2H25; SLC NAND may see supply tightness in 2H25.

• Oversupply in CMS is expected to ease by 2H25; healthy demand anticipated in automotive, AI, and networking applications.

• No cash dividends for 2024; board resolved not to distribute due to comprehensive loss.

• Company expects to be subject to carbon fees starting 2025 and will recognize provisions based on actual emissions.

• Ongoing assessment of Pillar Two income tax impact; no material exposure as of year-end.