Hsinchu, Taiwan — May 4, 2021 —Sino-American Silicon Products Inc. (SAS) board approved Q1 2021 earnings results today with the consolidated revenue of NT$16.052 billion, gross profit of NT$5.405 billion, operating profit of NT$3.961 billion, profit before tax of NT$3.613 billion, net income attributable to the parent company of NT$1.461 billion, and EPS of NT$ 2.49. Among which, revenue has been growing for 3 quarters consecutively! SAS’ semiconductor subsidiary, GlobalWafers (GWC) also reported its Q1 2021 revenue with consolidated revenue of NT$14.806 billion, operating profit of NT$ 3.952 billion, net income attributable to the parent company of NT$2.69 billion and EPS of NT$ 6.18.
Year-over-Year, Q1 2021 consolidated revenue increased by 5.1%, gross profit increased by 7%, operating profit increased by 6.9%, net income attributable to the parent company increased by 5.5% and EPS increased by NT$ 0.12. Q1 2021 operating performance of SAS was enhanced by GWC’s outstanding performance, which has been growing for 5 quarters, and contributed 92% to SAS’ revenue. The consecutive growth mainly came from the newly-built 12” fab in Korean subsidiary, which went into production smoothly and reached full capacity and output ahead of schedule in the first quarter. In addition to the Korean fab, other plants in GlobalWafers Group all actively expand 12“, 8”, GaN and SiC production lines in the existing campus.
Regarding GWC’s lower Q1 2021 EPS comparing with last quarter, other than impacts from extreme winter storm in the US and magnitude 7 earthquakes in Japan forcing closure of certain factories, rising shipping costs and increase in raw material costs, one of the reasons is due to mark-to-market loss on the shares of Siltronic AG (“Siltronic”) held by GWC. To ensure the success of tender offer to Siltronic, GWC and its subsidiaries have acquired shares of Siltronic through the market and currently hold 13.67% of total shares outstanding in aggregate. The investment has been recorded as “Financial Assets at Fair Value through Other Comprehensive Income” on the financial statements. According to IFRS accounting policy, the investment will be booked as “Investments Accounted for Using Equity Method” on the balance sheet only after receipt of all necessary regulatory approvals and settlement of the transaction. As at end of March 2021, lower share price of Siltronic and fluctuation of Euro / New Taiwan Dollar exchange rate comparing with the GWC’s purchase cost resulted in “other losses” based on mark-to-market valuation and amounted to nearly NTD$ 0.8 billion, which impacted the overall EPS performance. If excluding the aforementioned factor, GWC’s Q1 2021 EPS would be at similar level of previous quarters. Upon closing of the Siltronic transaction, the investment would be valued and recorded based on the tender offer price (EUR 145 per share).
As for GlobalWafers’ offer to Siltronic AG, the Taiwan Fair Trade Commission has unconditionally cleared the deal yesterday. As of the date of this release, we have obtained antitrust merger control approvals from the relevant regulators in Austria, Germany, South Korea and Taiwan as well as clearance from CFIUS. The company continues to expect the closing of the transaction in the second half of 2021. The closing of the offer remains subject to receipt of further regulatory approvals.
As the world enters the post-COVID-19 era, the solar demand outlook is becoming brighter. With numerous countries have announced their commitment to achieving carbon neutrality or zero carbon emissions within certain period of time, the prospect of renewable energy is promising. In the solar industry supply chain, SAS not only provides high-efficiency mono-Si solar cell, modules and downstream PV plant O&M (operation and maintenance), but also actively deploys in energy storage, renewable energy and other fields and will endeavor to become a renewable energy total solution provider. At present, the global semiconductor supply chain is actively increasing the proportion of green energy and reducing carbon emissions while improving technology and production capacity. SAS will fully assist GWC’s Taiwan plant as well as its upstream and downstream strategic partners to enlarge green power weight and contribute to the industry and the environment.
The results of the seventh (2020) Corporate Governance Evaluation were announced. SAS and GWC were once again awarded top 5% among all listed companies. These are SAS’ 7th consecutive award and GWC’s 3rd consecutive award, showing SAS-Group’s continuous refinement and improvement of corporate governance, and fulfillment of corporate social responsibility.
In order to share the results with shareholders more quickly, SAS has started paying dividends semi-annually since this year. The Board of Directors also approved today the cash dividend payment plan for the second half of 2020. It is proposed to distribute a cash dividend of NT$ 5.5 per share, with a total amount of NT$3.224 billion for the second half of 2020. If the cash dividend of NT$3.5 per share (total amount of NT$2.052 billion) distributed in the first half is included, an annual cash dividend of NT$ 9.0 per share (total annual amount of NT$5.276 billion) is distributed throughout 2020. SAS’ Annual General Shareholder Meeting will be convened at 9 a.m. on June 24 at the Hsinchu Science Park Life Hub, Taiwan.