AU Optronics Corp. ("AUO" or the "Company") (TAIEX: 2409; NYSE: AUO) today held its investors conference and announced its unaudited earnings results for the fourth quarter of 2012(1).
Consolidated revenue in the fourth quarter of 2012 was NT$99,400 million (US$3,422 million) (2), down 3.3% from the previous quarter. Gross profit was NT$2,822 million (US$97 million), with the gross margin of 2.8%. Operating loss was NT$4,762 million (US$164 million), with the operating margin of -4.8%. AUO's net loss for the fourth quarter of 2012 was NT$13,172 million (US$453 million). Net loss attributable to equity holders of the parent company was NT$12,463 million (US$429 million), or a basic EPS of -NT$1. 41 (-US$0.49 per ADR).
4Q2012 Result Highlights
AUO's unaudited consolidated results for the fourth quarter of 2012 were highlighted as below:
- Revenue was NT$99,400 million, down 3.3% quarter-over-quarter
- Net loss was NT$13,172 million
- Basic EPS was -NT$1. 41
- Gross margin was 2.8%
- Operating margin was -4.8%
- EBITDA (3) margin was 12.7%
In the fourth quarter of 2012, shipments for AUO's large-sized panel shipments reached around 31.0 million units, down by 6.7% quarter-over-quarter. Shipments for small and medium-sized panels were around 37.6 million units, down 10.8% quarter-over-quarter.
Looking back to the fourth quarter of 2012, the Company's loss came mainly from non-operating items, which include:
(1) Asset impairment losses: The Company conducted asset impairment tests at the end of the year in accordance with the accounting principles, and aggregately recognized approximately NT$4.3 billion of asset impairment losses this quarter. However, these asset impairment losses were non-cash losses, and therefore would not create any impacts to the Company's operating cash flows.
(2) Anti-trust cases: The Company proactively resolved certain antitrust related civil cases this quarter, and so recognized a total of approximately NT$3.3 billion for anti-trust related expenses and losses.
With the recognition of these non-operating losses, it is hoped that these efforts could help mitigate the possible impacts and uncertainties of the relevant matters on the Company's future earnings.
As for the core operations, the Company's gross margin has turned positive, while its operating losses also came down significantly compared with the previous quarter. Among these, the display industry has been gradually recovering, and so driven by the TV panels, the Company's utilization rates and shipment area both improved at a steady pace. Through the continuous platform simplification and the operational restructuring by management team, the Company also effectively enhanced the product mix and production efficiency in the fourth quarter. As a result, these efforts have made the Company's EBITDA margin of the display segment improve to 13.5%. With regard to the solar business, after proactively adjusting its operational scale and controlling the expenses, the Company's operating losses for the solar segment also reduced considerably.
Looking forward to 2013, the new technologies that the Company has cultivated for a long time are getting ready, and in particular, the operations for high-end products in small-and-mid sizes are expected to return to the track. With more top-tier brands added to the customer base of small-and-mid sized business, it is hoped that the Company has chances to gain more market shares. In addition, with the trend that display industry is moving to the device with higher resolution and large screens, the industry supply and demand is expected to become healthier. AUO will continue to focus on its core competence and strengthen our portfolio of the high-end products, aiming to maximize the capacity value and enhance the Company's operating performance.
(1) All financial information was unaudited and was prepared by the Company in accordance with generally accepted accounting principles in Taiwan (“ROC GAAP”).
(2) Amounts converted by an exchange rate of NTD29.05:USD1 based on Federal Reserve Bank of New York, USA as of December 31, 2012.
(3) EBITDA=Operating Income +D&A, that is, operating income before depreciation and amortization.