2020-08-06

Taipei, Taiwan, July 30th, 2020 – TPK Holding Co., Ltd (TWSE: 3673) (“TPK” or the “Company”) today announced 2020 second quarter unaudited operating results.  Company reported net profits of NT$308 million, or earnings per share of NT$0.76 for the quarter.  For the first six months of 2020, net profit totaled NT$348 million, or earnings per share of NT$0.85.

2Q20 Operating Results

Second quarter revenues remained flattish to first quarter at NT$28,049 million, down merely 0.5% quarter-on-quarter and down 1.4% year-on-year, despite supply chain disruption and deferred consumption caused by Coronavirus pandemic.  Notebook (11” to 16”) shipment in the quarter was up 16% sequentially and 51% year-on-year, in the backdrop of worldwide COVID-19 lockdowns have led to demand surge from increasing work-from-home and online learning.  Tablet (7” to 11”) segment also posted 27% volume growth compared to the previous quarter.  On contrary, smartphone (<7”) shipment declined 36% quarter-on-quarter and down 25% from the same period last year, due to store shutdowns, sluggish end demand and product transition.

In spite of flattish revenue growth, gross profit in this quarter increased from NT$1,011 million in 1Q20 to NT$1,397 million, up 38.1% quarter-on-quarter and up 16.7% year-on-year.  Gross margin also enhanced from 3.6% in the previous quarter to 5.0% in 2Q20 which was attributable to favorable product mix change that resulted in raw material cost, as a percentage of sales down from 83.9% in 1Q20 to 82.5% in the second quarter.  In addition, Company’s human capital management team also effectively managed the headcount during the pandemic and maintained the labor cost at 5.5% of sales in the second quarter, flat to 5.6% in 1Q20.

Operating expense controls remained intact and effective at 3.5% of sales, marginally up from 3.2% for last quarter.  As a result, 2Q20 operating profits amounted to NT$428 million, up from NT$109 million in 1Q20.  2Q20 net interest expenses was NT$13 million, down significantly from NT$34 million in the previous quarter.  Company recorded foreign exchange loss of NT$17 million due to appreciation of RMB versus USD.

Balance Sheet & Cash Flow 

As of June 30th 2020, cash & cash equivalent and financial assets measured at amortized cost totaled NT$34.8 billion, down from NT$35.8 billion at the end of first quarter.  Capital expenditure for the quarter was NT$295 million on accrual basis.  Total bank borrowings, as end of this quarter, totaled NT$25.7 billion, significantly down from NT$31.8 billion in 1Q20, indicating Company’s net cash position of NT$9.1 billion as of end of this quarter.  2Q20 EBITDA amounted to NT$2.4 billion.  EBITDA for the first six months of 2020 amounted to NT$4.5 billion.

Note: All financial numbers are prepared in accordance with IFRs, which is approved by regulators in Taiwan.