© AT&S PCB | January 31, 2017
AT&S stays red
Based on the start-up effects of the Chongqing project (EUR 51.6 million), EBITDA decreased by EUR 38.1 million or -27.2 Prozent from EUR 140.2 million to EUR 102.1 million in the first nine months.
Adjusted for these start-up effects, EBITDA amounted to EUR 153.7 million, up 8.5% on the high prior-year value, based on running cost savings and positive currency effects. The EBITDA margin was at 16.6%, down -7.4 percentage points on the very high prior-year level of 24.0%. Adjusted for the Chongqing project, the margin, at 26.0%, significantly exceeds the high adjusted level of 24.4% in the previous year. Depreciation of property, plant and equipment and amortisation of intangible assets increased to EUR 90.3 million (prior-year period: EUR 64.2 million) based on the Chongqing project. Consequently, EBIT decreased by EUR 64.3 million from EUR 76.1 million to EUR 11.8 million. Adjusted for the Chongqing project, EBIT amounted to EUR 97.2 million, thus exceeding the adjusted prior-year value by EUR 13.4 million. The EBIT margin was 1.9% (prior-year period: 13.0%). The adjusted margin amounted to 16.4%, and was 1.9 percentage points higher than the adjusted prior-year level of 14.5%. Finance costs dropped from EUR -2.7 million to EUR -18.6 million, which was among other things due to higher gross interest expenses and negative currency effects. The estimates for feasibility of deferred taxes were adjusted and led to increased tax expenses of total EUR 13.0 million in the first nine months of 2016/17. The profit for the period decreased by EUR 79.9 million from EUR 60.2 million in the prior-year period to a loss for the period of EUR -19.7 million due to the start-up effects of the Chongqing project and the significantly higher negative financial result. This resulted in a decline in earnings per share from EUR 1.55 in the prior-year period to EUR -0.51. © AT&S Status Chongqing: Operational improvements at the plant for IC substrates; good progress at plant 2 for substrate-like printed circuit boards As at 31 December 2016, AT&S invested EUR 428.0 million in the Chongqing project. The optimisation of the highly complex production facilities for IC substrates still causes a flatter ramp-up although there have been significant operational improvements, which have led to a higher volume output and yield. The ramp of the second production line started in December 2016. The first production line for substrate-like printed circuit boards is running at high capacity and good performance, the second production line is in installation. Outlook for the financial year 2016/17 AT&S expects the usual seasonality for the fourth quarter of 2016/17. Based on the developments in the raw material markets (copper, laminates), cost of material is under pressure. Due to changes in product and technology cycle in the semiconductor industry, price pressure for IC substrates continues. Provided that the macroeconomic environment remains stable, the USD-EUR currency relation stays at a similar level as in the past financial year 2015/16 and demand is stable in the core business, AT&S expects an increase in revenue of 4-6% for the current financial year 2016/17. The EBITDA margin should range between 15-16% primarily based on the start-up costs for the plants in Chongqing. However, the EBITDA margin in the core business should be at a similar level as in the financial year 2015/16. Higher depreciation and amortisation of an additional EUR 40 million for the Chongqing project in the financial year 2016/17 will have a significant influence on EBIT.
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