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AU Optronics Reports Unaudited First Half 2004 Results (2004.07.22)
Consolidated Revenues of NT$89,861 Million and Net Income of NT$26,054 Million Set Record Highs
Hsinchu, Taiwan

AU Optronics Corp. ("AUO" or the "Company") (TAIEX: 2409; NYSE: AUO), the world's third largest manufacturer of large-size TFT-LCD panels, today announced its unaudited consolidated results of operations for the six months ended June 30, 2004. All financial information was prepared by the Company in accordance with generally accepted accounting principles in Taiwan ("ROC GAAP"). There are many differences between ROC GAAP and U.S. GAAP, some of which are described in the notes to the financial statements contained in the Company's annual report on Form 20-F filed with the United States Securities and Exchange Commission on May 7, 2004. The unaudited financial information mentioned herein is not necessarily indicative of our future financial results.

AU Optronics Corp. ("AUO" or the "Company") (TAIEX: 2409; NYSE: AUO) today held a meeting of the Board of Directors and Supervisors, at which the Board approved its unaudited financial results for the six months ended June 30, 2004.

Unaudited consolidated net sales and net income for 1H 2004 totaled historical high of NT$89,861 million and NT$26,054 million, respectively, with Earnings per share of NT$5.59. Both consolidated net sales and net income for 2Q 2004 set the record high performance for a single quarter, net sales increased 17.4% to NT$48,530 million while net income rose 23.3% to NT$14,385 million over the previous quarter. Unconsolidated net sales for the first half and second quarter of 2004 totaled NT$86,880 million and NT$48,344 million, respectively.

"Despite traditional slow PC season taking effect from June 2004, AUO delivered solid 2Q04 results, mainly attributed to the smooth ramp up and high yield rates achieved at AUO's fifth generation production facilities (5G fabs), successful cost control, product mix enhancement and capacity allocation optimization. As a result, the gross profit for the second quarter 2004 increased 22.1% to NT$17,152 million, compared to NT$14,045 million in the previous quarter; gross margin improved to 35.3% in the second quarter from 34% in the first quarter of 2004. Our operating profit for the quarter totaled NT$14,743 million, with operating margin of 30.4%, as compared to 28.4% for the previous quarter, with earnings per share of NT$3.08 for the quarter" commented Mr. Max Cheng, Vice President and Chief Financial Officer.

Dr. Hui Hsiung, Executive Vice President, noted that "AUO's unit shipment of large size panels totaled 4.73 million, a 14.3% QoQ growth. For the first half 2004, large size panel shipment totaled 8.86 million.

Unit shipment for small and medium size panels in second quarter 2004 recovered from seasonal weakness, posting significant growth of 41.4% to 7.3 million from the previous quarter. Total shipment for small and medium size panels reached 12.5 million in 1H 2004.

Safe Harbour Notice
Except for statements in respect of historical matters, the statements contained in this Release are "forward-looking statements" within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934. These forward-looking statements were based on our management's expectations, projections and beliefs at the time regarding matters including, among other things, future revenues and costs, financial performance, technology changes, capacity, utilization rates, yields, process and geographical diversification, future expansion plans and business strategy. Such forward looking statements are subject to a number of known and unknown risks and uncertainties that can cause actual results to differ materially from those expressed or implied by such statements, including risks related to the flat panel display industry, the TFT-LCD market, acceptance and demand for our products, technological and development risks, competitive factors, and other risks described in the section entitled "Risk Factors" in our Form F-3 filed with the United States Securities and Exchange Commission on June 17, 2004.