All currency figures stated in this report are in US Dollars unless stated otherwise.
The Company started to prepare consolidated financial statements in accordance with International Financial Reporting Standards ("IFRS") in 2012's Annual Report. A ll prior period information has been reclassified to conform to IFRS presentation.
SHANGHAI, Oct. 22, 2013 /PRNewswire/ -- Semiconductor Manufacturing International Corporation (NYSE: SMI; SEHK: 981) ("SMIC" or the "Company"), one of the leading semiconductor foundries in the world, today announced its consolidated results of operations for the three months ended September 30, 2013.
Third Quarter 2013 Highlights:
-- Revenue including wafer shipments from Wuhan Xinxin was $534.3 million in 3Q13, an increase of 15.8% year over year, and down 1.3% quarter over quarter.
-- Non-GAAP revenue excluding wafer shipments from Wuhan Xinxin was $503.7 million in 3Q13, an increase of 21.7%year over year, and up 0.4% quarter over quarter.
-- Revenues from China-based customers increased to 42.1% of overall revenue in 3Q13, an all-time high, compared to 35.3% in 3Q12 and 40.9% in 2Q13.
-- Gross margin including wafer shipments from Wuhan Xinxin was 21.0% in 3Q13, compared to 27.5% in 3Q12 and 25.0% in 2Q13.
-- Non-GAAP gross margin excluding wafer shipments from Wuhan Xinxin was 22.1% in 3Q13, compared to 30.4% in 3Q12 and 26.7% in 2Q13.
-- Profit attributable to SMIC was $42.5 million in 3Q13, compared to $12.0 million in 3Q12 and $75.4 million in 2Q13.
Fourth Quarter 2013 Guidance:
The following statements are forward looking statements which are based on current expectations and which involve risks and uncertainties, some of which are set forth under "Safe Harbor Statements" below.
-- Excluding wafer shipments from Wuhan Xinxin which SMIC began gradually phasing out in 3Q13, non-GAAP revenue is expected to be flat to down 4.5% quarter over quarter.
-- Revenue including wafer shipments from Wuhan Xinxin is expected to be down 4.5% to down 9% quarter over quarter.
-- Non-GAAP gross margin excluding wafer shipments from Wuhan Xinxin is expected to range from 19.0% to 22.0%.
-- Gross margin including wafer shipments from Wuhan Xinxin is expected to range from 18.5% to 21.5%.
-- Non-GAAP operating expenses excluding the effect of foreign exchange, employee bonus accrual, funding of R&D contracts from the government and gain from the disposal of living quarters are expected to range from $80.0 million to $84.0 million.
Dr. Tzu-Yin Chiu, SMIC's Chief Executive Officer and Executive Director, commented, "SMIC has achieved another good quarter. Revenue excluding Wuhan wafer shipment was $503.7 million in the third quarter of 2013, representing a robust year over year growth of 21.7% and a sequential growth of 0.4%. Total revenue including Wuhan wafer shipments declined 1.3% sequentially as we exit our relationship with Wuhan Xinxin. I'm also pleased that we made $42.5 million in profit attributable to SMIC, which is our sixth consecutive quarter of positive profit.
I am happy to announce that 40nm wafer revenue grew 50.3% sequentially to 15.7% of total wafer revenue. This growth was mainly driven by smartphone related products. Meanwhile, 40nm new tape outs grew significantly in the second half of this year, driven by both consumer and communications products like smartphones, set-top box, IPTV, and tablets. As a result, we are targeting strong growth for 40nm next year.
During the quarter, demand for our differentiated applications continued to be strong, especially in the areas of power management, CIS, and EEPROM. Revenue from our differentiated applications, specifically PMIC, CIS, and EEPROM, grew over 50% year over year in 3Q2013 compared to 3Q2012.
We target another full year of record high revenue in 2013 with sustainable profitability and growth as our priority. Looking into 2014, we aim to outgrow the industry average again. We have a number of exciting opportunities ahead of us. 1) Our 40nm ramp up will continue. 2) Our 28nm technology is coming on line. 3) Our embedded Non-Volatile Memory (e-NVM) is finding wide spread customer acceptance. 4) A number of other differentiated technologies will be rolling out in 2014. And lastly, our new capacity for high-end and mature technology is coming on line. It will be an exciting 2014."
Conference Call / Webcast Announcement
Date: October 23, 2013
Time: 8:30 a.m. Shanghai time
Dial-in numbers and pass code:
China 400-620-8038 (Pass code: SMIC)
Hong Kong 852-2475-0994 (Pass code: SMIC)
Taiwan 886-2-2650-7825 (Pass code: SMIC)
United States, New York 1-845-675-0437 (Pass code: SMIC)
The call will be webcast live with audio at
http://www.smics.com/eng/investors/ir_presentations.php or http://www.media-server.com/m/p/k3yzasi5.
An archived version of the webcast, along with an electronic copy of this news release will be available on the SMIC website for a period of 12 months following the webcast.
About SMIC
Semiconductor Manufacturing International Corporation ("SMIC"; NYSE: SMI; SEHK: 981) is one of the leading semiconductor foundries in the world and the largest and most advanced foundry in mainland China, providing integrated circuit (IC) foundry and technology services at 0.35-micron to 40-nanometer. Headquartered in Shanghai, China, SMIC has a 300mm wafer fabrication facility (fab) and a 200mm mega-fab in Shanghai, a 300mm mega-fab in Beijing, a 200mm fab in Tianjin, and a 200mm fab project under development in Shenzhen. SMIC also has customer service and marketing offices in the U.S., Europe, Japan, and Taiwan, and a representative office in Hong Kong.
For more information, please visit www.smics.com.
Safe Harbor Statements
(Under the Private Securities Litigation Reform Act of 1995)
This press release contains, in addition to historical information, "forward-looking statements" within the meaning of the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements, including statements under "Fourth Quarter 2013 Guidance" and in the last paragraph of the quote of SMIC's Chief Executive Officer, as well as the statements regarding future 2013 capital expenditures are based on SMIC's current assumptions, expectations and projections about future events. SMIC uses words like "believe," "anticipate," "intend," "estimate," "expect," "project" and similar expressions to identify forward-looking statements, although not all forward-looking statements contain these words. These forward-looking statements involve significant risks, both known and unknown, uncertainties and other factors that may cause SMIC's actual performance, financial condition or results of operations to be materially different from those suggested by the forward-looking statements including, among others, risks associated with the global economic slowdown, orders or judgments from pending litigation and financial stability in end markets.
Investors should consider the information contained in SMIC's filings with the U.S. Securities and Exchange Commission (SEC), including its annual report on 20-F filed with the SEC on April 15, 2013, especially the consolidated financial statements, and such other documents that SMIC may file with the SEC or The Hong Kong Stock Exchange Limited ("SEHK") from time to time, including current reports on Form 6-K. Other unknown or unpredictable factors also could have material adverse effects on SMIC's future results, performance or achievements. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this press release may not occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated, or if no date is stated, as of the date of this press release. Except as may be required by law, SMIC undertakes no obligation and does not intend to update any forward-looking statement, whether as a result of new information, future events or otherwise.
About Non-Generally Accepted Accounting Principles ("Non-GAAP") Financial Measures
To supplement SMIC's consolidated financial results presented in accordance with IFRS, SMIC uses in this press release measures of operating results that are adjusted to exclude wafer shipments from Wuhan Xinxin Semiconductor Manufacturing Corporation ("Wuhan Xinxin"), which SMIC began gradually phasing out in 3Q13. This earnings release includes non-GAAP revenue, non-GAAP cost of sales and non-GAAP gross margin. It also includes fourth quarter 2013 guidance for non-GAAP revenues and non-GAAP gross margin, which exclude such shipments, and for non-GAAP operating expenses, which is adjusted to exclude the effect of foreign exchange, employee bonus accrual, funding of R&D contracts from the government and gain from the disposal of living quarters. The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with IFRS.
SMIC believes that use of these non-GAAP financial measures facilitates investors' and management's comparisons to SMIC's historical performance. The Company's management regularly uses these non-GAAP financial measures to understand, manage and evaluate the Company's business and make financial and operational decisions.
The accompanying table has more information and reconciliations of each non-GAAP financial measure to its most directly comparable GAAP financial measure. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis.
Contact:
Investor Relations
+86-21-3861-0000 ext. 12804
ir@smics.com
Summary of Third Quarter 2013 Operating Results
-----------------------------------------------
Amounts in US$ thousands, except for EPS and operating data
3Q13 2Q13 QoQ 3Q12 YoY
Revenue 534,256 541,302 -1.3% 461,168 15.8%
Cost of sales (422,274) (406,075) 4.0% (334,347) 26.3%
------- ------- -------
Gross profit 111,982 135,227 -17.2% 126,821 -11.7%
Operating expenses (63,447) (56,095) 13.1% (106,455) -40.4%
------- ------- -------
Profit from operations 48,535 79,132 -38.7% 20,366 138.3%
Other expense, net (4,681) (3,292) 42.2% (7,335) -36.2%
------ ------ ------
Profit before tax 43,854 75,840 -42.2% 13,031 236.5%
Income tax expenses (914) (510) 79.2% (1,112) -17.8%
---- ---- ------
Profit for the period 42,940 75,330 -43.0% 11,919 260.3%
Other comprehensive income:
Exchange differences on 77 278 -72.3% 258 -70.2%
translating foreign operations
Total comprehensive income 43,017 75,608 -43.1% 12,177 253.3%
for the period
Profit attributable to SMIC 42,491 75,401 -43.6% 11,966 255.1%
Gross margin 21.0% 25.0% - 27.5% -
Earnings per ordinary share 0.00 0.00 - 0.00 -
(basic and diluted)((1))
Earnings per ADS (basic and 0.07 0.12 - 0.02 -
diluted)
Wafers shipped (in 8" 653,090 687,651 -5.0% 605,543 7.9%
equivalent wafers)
Capacity utilization((2)) 88.2% 98.5% - 92.0% -
------------------------
Note:
(1) Based on weighted average ordinary shares of 32,084 million (basic) and 32,355 million (diluted) in 3Q13, 32,051 million (basic) and
32,312 million (diluted) in 2Q13, and 31,983 million (basic) and 31,993 million (diluted) in 3Q12.
(2) Based on total equivalent wafers out divided by estimated total quarterly capacity.
Revenue decreased to $534.3 million in 3Q13, down 1.3% QoQ from $541.3 million in 2Q13, mainly due to a decrease of revenue generated by
shipments from Wuhan Xinxin. The Company began phasing out wafer shipments from Wuhan Xinxin in 3Q13.
Non-GAAP revenue excluding wafer
shipments from Wuhan Xinxin was $503.7 million in 3Q13, compared to $501.8 million in 2Q13.
Cost of sales increased to $422.3 million in
3Q13, up 4.0% QoQ from $406.1 million in 2Q13.
Gross profit was $112.0 million in 3Q13, a decrease of 17.2% QoQ from $135.2 million in
2Q13.
Gross margin was 21.0% in 3Q13, down from 25.0% in 2Q13 primarily due to lower fab utilization in 3Q13 and product mix change.
Non-GAAP gross margin excluding wafer shipments from Wuhan Xinxin was 22.1% in 3Q13, down from 26.7% in 2Q13.
Operating expenses
increased to $63.4 million in 3Q13, an increase of 13.1% QoQ from $56.1 million in 2Q13, mainly due to the reasons stated in Operating
Expenses (Income) Analysis below.
------------------------------------------------------------------------------------------------------------------------------------------
Analysis of Revenue
-------------------
Revenue Analysis
By Application 3Q13 2Q13 3Q12
-------------- ---- ---- ----
Computer 1.8% 1.5% 1.5%
Communications 44.4% 45.6% 46.7%
Consumer 43.9% 45.3% 43.1%
Others 9.9% 7.6% 8.7%
By Service Type 3Q13 2Q13 3Q12
--------------- ---- ---- ----
Wafers 93.8% 96.2% 94.9%
Mask making, testing, others 6.2% 3.8% 5.1%
By Customer Type 3Q13 2Q13 3Q12
---------------- ---- ---- ----
Fabless semiconductor
companies 87.7% 87.7% 86.8%
Integrated device
manufacturers (IDM) 5.5% 7.0% 8.8%
System companies and others 6.8% 5.3% 4.4%
By Geography 3Q13 2Q13 3Q12
------------ ---- ---- ----
North America 46.0% 48.3% 55.2%
China((1)) 42.1% 40.9% 35.3%
Eurasia((2)) 11.9% 10.8% 9.5%
Wafer Revenue Analysis
----------------------
By Technology (logic, memory
only) 3Q13 2Q13 3Q12
---------------------------- ---- ---- ----
40/45 nm 15.7% 10.0% 0.8%
55/65 nm 27.1% 30.9% 34.8%
90 nm 4.7% 4.6% 9.4%
0.13 micrometers 10.1% 10.5% 11.8%
0.15/0.18 micrometers 38.4% 40.1% 37.5%
0.25/0.35 micrometers 4.0% 3.9% 5.7%
--------------------- --- --- ---
Note:
(1) Including Hong Kong, but excluding Taiwan
(2) Excluding China
Capacity*
--------
Fab / (Wafer Size) 3Q13 2Q13
Shanghai Mega Fab
(8") 90,000 90,000
Shanghai 12-inch Fab
(12") 24,750 18,000
Beijing Mega Fab
(12") 81,000 81,000
Tianjin Fab (8") 36,000 34,500
Total monthly wafer
fabrication
capacity 231,750 223,500
------------------- ------- -------
Note:
* Wafers per month at the end of the period in 8"
equivalent wafers, calculated on a 30-day basis for
comparison purposes
Monthly capacity increased to 231,750 8-inch
equivalent wafers in 3Q13 from 223,500 8-inch
equivalent wafers in 2Q13, primarily due to the
expansion of capacity in our Shanghai 12-inch fab.
Shipment and Utilization
------------------------
8"
equivalent
wafers 3Q13 2Q13 QoQ 3Q12 YoY
Wafer
shipments 653,090 687,651 -5.0% 605,543 7.9%
Utilization
rate((1)) 88.2% 98.5% - 92.0% -
----------- ---- ---- --- ---- ---
Note:
(1) Based on total equivalent wafers out divided by estimated
total quarterly capacity.
Detailed Financial Analysis
---------------------------
Gross Profit Analysis
Amounts in
US$
thousands 3Q13 2Q13 QoQ 3Q12 YoY
Cost of
sales 422,274 406,075 4.0% 334,347 26.3%
Depreciation 126,433 107,759 17.3% 93,258 35.6%
Other
manufacturing
costs 294,374 295,840 -0.5% 240,620 22.3%
Share-based
compensation 1,467 2,476 -40.8% 469 212.8%
Gross profit 111,982 135,227 -17.2% 126,821 -11.7%
Gross margin 21.0% 25.0% - 27.5% -
------------ ---- ---- --- ---- ---
Cost of sales was $422.3 million in 3Q13, up 4.0% QoQ from $406.1 million in 2Q13.
Depreciation within the cost of sales increased to $126.4 million in 3Q13, compared to
$107.8 million in 2Q13.
Other manufacturing costs within the cost of sales decreased to
$294.4 million in 3Q13, compared to $295.8 million in 2Q13.
Gross profit was $112.0
million in 3Q13, a decrease of 17.2% QoQ from $135.2 million in 2Q13.
Gross margin was
21.0% in 3Q13, down from 25.0% in 2Q13 primarily due to lower fab utilization in 3Q13
and product mix change.
Operating Expenses (Income) Analysis
Amounts in US$ thousands 3Q13 2Q13 QoQ 3Q12 YoY
Operating expenses 63,447 56,095 13.1% 106,455 -40.4%
Research and development 37,564 36,736 2.3% 72,945 -48.5%
General and administrative 24,718 42,636 -42.0% 24,859 -0.6%
Selling and marketing 9,324 9,775 -4.6% 8,178 14.0%
Other operating expense (income) (8,159) (33,052) -75.3% 473 -
------------------------------- ----- ------ ----- --- ---
R&D expenses increased to $37.6 million in 3Q13, compared to $36.7 million in 2Q13. The increase was primarily due to an
$6.8 million increase in R&D expenses associated with higher R&D activities from quarter to quarter, partially offset by a
$6.0 million increase in funding of R&D contracts from the government, which was $9.0 million in 3Q13, compared to $3.0
million in 2Q13.
General and administrative expenses decreased to $24.7 million in 3Q13, down 42.0% QoQ from $42.6 million
in 2Q13, mainly due to a decrease of employee bonus accrual in 3Q13.
Other operating income was $8.2 million in 3Q13,
compared to $33.1 million in 2Q13, and consisted mainly of the gain arising from the disposal of part of the Company-owned
living quarters in Shanghai. This 75.3% decrease from 2Q13 was mainly due to a one-time gain recorded in 2Q13 arising from
the disposal of the Company's total ownership interest in SMIC (Wuhan) Development Corporation.
Other Income (expense), Net
Amounts in US$
thousands 3Q13 2Q13 QoQ 3Q12 YoY
Other income
(expense), net (4,681) (3,292) 42.2% (7,335) -36.2%
Interest income 1,394 936 48.9% 1,088 28.1%
Finance costs (8,673) (9,080) -4.5% (11,150) -22.2%
Foreign exchange
gains or losses 2,404 2,949 -18.5% 1,405 71.1%
Other gains or losses (357) 1,126 - 537 -
Share of profits of
associates 551 777 -29.1% 785 -29.8%
------------------- --- --- ----- --- -----
The change of other gains or losses was mainly due to a decrease of revenue from our schools
as a result of summer vacation.
Depreciation and Amortization
Amounts in US$
thousands 3Q13 2Q13 QoQ 3Q12 YoY
-------------- ---- ---- --- ---- ---
Depreciation and
amortization 136,725 135,712 0.7% 143,219 -4.5%
---------------- ------- ------- --- ------- ----
Liquidity
Amounts in US$
thousands 3Q13 2Q13
Cash and bank balances 473,507 262,955
Restricted cash 195,813 214,430
Other financial assets 2,574 2,881
Trade and other
receivables 396,108 472,426
Prepaid operating
expenses 48,383 57,231
Inventories 289,954 308,328
Assets classified as
held-for-sale 210 922
Total current assets 1,406,549 1,319,173
Current tax liabilities 85 143
Other financial
liabilities 10 107
Promissory notes 14,895 14,791
Accrued liabilities 105,497 104,678
Deferred government
grant 17,833 26,924
Borrowings 548,385 586,425
Trade and other
payables 402,827 537,003
Total current
liabilities 1,089,532 1,270,071
Cash Ratio 0.4x 0.2x
Quick Ratio 1.0x 0.8x
Current Ratio 1.3x 1.0x
------------- ---- ----
Capital Structure
Amounts in US$ thousands 3Q13 2Q13
Cash and bank balances 473,507 262,955
Restricted cash 195,813 214,430
Current portion of promissory
notes 14,895 14,791
Short-term borrowings 548,385 586,425
Long-term borrowings 553,435 474,692
Total debt 1,101,820 1,061,117
Equity 2,559,381 2,403,738
Total debt to equity
ratio((1)) 43.1% 44.1%
-------------------- ---- ----
Note:
(1) Total debt divided by equity, total debt including short-term
and long-term borrowings.
Cash and bank balances increased to $473.5 million in 3Q13, up 80.1%
QoQ from $263.0 million in
2Q13 primarily because 1) of the receipt of $108.0 million in cash as
partial capital contribution for the
joint venture company established in Beijing from the other
shareholders of the joint venture and
2) the Company drew down some of the bank borrowings during 3Q13.
Cash Flow
Amounts in US$
thousands 3Q13 2Q13
Net cash from
operating activities 269,581 108,360
Net cash used in
investing activities (213,133) (242,559)
Net cash from
financing activities 154,045 104,167
Effect of exchange
rate changes 59 55
Net change in cash 210,552 (29,977)
------------------ ------- -------
Capex Summary
-- Capital expenditures for 3Q13 were $169.3 million.
The planned 2013 capital expenditure for our foundry operation is $675 million.
-- The 2013 planned capital expenditure does not account for additional expenditures for the joint venture company in Beijing, which was established in July 2013. The joint venture company will principally engage in, among other things, the testing, development, design, manufacturing, packaging and sale of integrated circuits.
-- In addition, we have budgeted capital expenditures of another $130 million in 2013 for the construction of living quarters for employees as part of the Company's employee retention program. We plan to either rent out or sell these living quarter units to employees in the future.
Recent Highlights and Announcements
-- SMIC IP R&D Center Applies EDA Solution of Beijing Empyrean (2013-10-04)
-- SMIC Introduces Its Diversifying Embedded Non-Volatile Memory Platform (2013-09-23)
-- SMIC Selected as Constituent of Hang Seng Corporate Sustainability Index Series for Third Consecutive Year (2013-09-11)
-- Grant of Options (2013-09-09)
-- ŸSMIC Adopts Cadence Digital Flow with Advanced Features for Improving Area, Power and Performance (2013-09-04)
-- SMIC's 2013 Technology Symposiums Kicks Off in Shanghai (2013-09-04)
-- Circulars - Letter and Reply Form to New Registered Shareholder - Election of Means of Receipt and Language of Corporate Communication (2013-09-03)
-- Circulars - Notification Letter and Request Form to Non-registered Holders (2013-09-03)
-- Circulars - Notification Letter and Change Request Form to Registered Holders (2013-09-03)
-- Announcement of Unaudited Interim Results for the Six Months Ended June 30, 2013 (2013-08-26)
-- Notification of Board Meeting (2013-08-14)
-- List of Directors and Their Roles and Functions (2013-08-08)
-- Appointment of Independent Non-executive Director (2013-08-08)
-- SMIC Reports Unaudited Results for the Three Months Ended June 30, 2013 (2013-08-08)
-- Notification of Board Meeting (2013-07-19)
Please visit SMIC's website at http://www.smics.com/eng/press/press_releases.php and http://www.smics.com/eng/investors/ir_filings.php for further details regarding the recent announcements.
Semiconductor Manufacturing International Corporation
CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND COMPREHENSIVE INCOME
(In US$ thousands except share data)
For the three months ended
--------------------------
September 30, 2013 June 30, 2013
(Unaudited) (Unaudited)
---------- ----------
Revenue 534,256 541,302
Cost of sales (422,274) (406,075)
-------- --------
Gross profit 111,982 135,227
Research and development (37,564) (36,736)
General and administration
expenses (24,718) (42,636)
Sales and marketing
expenses (9,324) (9,775)
Other operating income 8,159 33,052
Profit from operation 48,535 79,132
Other expense, net (4,681) (3,292)
Profit before tax 43,854 75,840
Income tax expense (914) (510)
---- ----
Profit for the period 42,940 75,330
====== ======
Other comprehensive income
Item that may be reclassified subsequently to profit or loss
Exchange differences on translating foreign operations 77 278
--- ---
Total comprehensive income
for the period 43,017 75,608
====== ======
Profit for the period attributable to:
Owners of the Company 42,491 75,401
Non-controlling interests 449 (71)
--- ---
42,940 75,330
====== ======
Total comprehensive income for the period attributable to:
Owners of the Company 42,568 75,679
Non-controlling interests 449 (71)
--- ---
43,017 75,608
====== ======
Earnings per share attributable to Semiconductor Manufacturing 0.00 0.00
International Corporation ordinary shareholders, basic and diluted
Earnings per ADS attributable to Semiconductor Manufacturing
0.07 0.12
International Corporation ordinary ADS holders, basic and diluted
Shares used in calculating basic earnings per share 32,083,651,959 32,051,257,487
Shares used in calculating diluted earnings per share 32,354,552,218 32,311,620,628
============== ==============
Reconciliations of Non-GAAP Financial Measures to Comparable
GAAP Measures((1))
Non-GAAP revenue 503,669 501,844
Non-GAAP cost of sales (392,407) (367,610)
Non-GAAP gross margin 22.1% 26.7%
==== ====
Note:
(1) SMIC defines non-GAAP revenue, non-GAAP cost of sales and non-GAAP gross margin, which are non-GAAP financial measures, as revenue, cost of sales and gross margin, in each case excluding wafer shipments
from Wuhan Xinxin. SMIC reviews non-GAAP financial measures together with revenue, cost of sales and gross margin to understand, manage and evaluate its business and make financial and operational decisions.
The Company also believe it is useful supplemental information for investors and analysts to assess its operating performance without the effect of wafer shipments from Wuhan Xinxin, which were not output
through its production capacity. SMIC announced in March 2013 that it had ceased to manage and operate the 300mm wafer fab in Wuhan owned by Wuhan Xinxin, and began gradually phasing out wafer shipments from
Wuhan Xinxin in 3Q13. However, the use of non-GAAP financial measures has material limitations as an analytical tool. One of the limitations of using non-GAAP financial measures is that they does not include
all items that impact our net profit for the period. In addition, because non-GAAP financial measures are not calculated in the same manner by all companies, they may not be comparable to other similar titled
measures used by other companies. In light of the foregoing limitations, you should not consider non-GAAP financial measure in isolation from or as an alternative to revenue, cost of sales and gross margin
prepared in accordance with IFRS.
The following table sets forth the reconciliation of each of non-GAAP revenue, non-GAAP cost of sales and non-GAAP gross margin to its most directly comparable financial measure presented in accordance with IFRS, for the periods indicated.
Semiconductor Manufacturing International Corporation
CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND COMPREHENSIVE INCOME
(In US$ thousands)
For the three months ended
--------------------------
September 30, 2013 June 30, 2013 September 30, 2012
(Unaudited) (Unaudited) (Unaudited)
---------- ---------- ----------
Revenue 534,256 541,302 461,168
Revenue from
Wuhan Xinxin (30,587) (39,458) (47,391)
------- ------- -------
Non-GAAP revenue 503,669 501,844 413,777
======= ======= =======
Cost of sales (422,274) (406,075) (334,347)
Cost of sales of
Wuhan Xinxin 29,867 38,465 46,204
------ ------ ------
Non-GAAP cost
of sales (392,407) (367,610) (288,143)
======== ======== ========
Gross margin 21.0% 25.0% 27.5%
==== ==== ====
Non-GAAP gross
margin 22.1% 26.7% 30.4%
==== ==== ====
Semiconductor Manufacturing International Corporation
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(In US$ thousands)
As of
-----
September 30, 2013 June 30, 2013
(Unaudited) (Unaudited)
---------- ----------
ASSETS
Non-current assets
Property, plant and equipment 2,558,563 2,523,893
Prepaid land use right 123,974 124,818
Intangible assets 227,380 228,898
Investments in associates 23,758 23,189
Deferred tax assets 43,889 43,802
Other assets 36,969 37,926
------ ------
Total non-current assets 3,014,533 2,982,526
--------- ---------
Current assets
Inventories 289,954 308,328
Prepaid operating expenses 48,383 57,231
Trade and other receivables 396,108 472,426
Other financial assets 2,574 2,881
Restricted cash 195,813 214,430
Cash and bank balances 473,507 262,955
------- -------
1,406,339 1,318,251
Assets classified as held-for-sale 210 922
--- ---
Total current assets 1,406,549 1,319,173
--------- ---------
TOTAL ASSETS 4,421,082 4,301,699
========= =========
EQUITY AND LIABILITIES
Capital and reserves
Ordinary shares, $0.0004 par value, 50,000,000,000 shares 12,836 12,830
authorized, 32,088,989,727 and 32,075,631,400 shares issued and
outstanding at September 30, 2013 and June 30, 2013, respectively
Share premium 4,088,854 4,088,071
Reserves 56,993 53,079
Accumulated deficit (1,708,540) (1,751,031)
---------- ----------
Equity attributable to owners of the Company 2,450,143 2,402,949
Non-controlling interests 109,238 789
------- ---
Total equity 2,559,381 2,403,738
--------- ---------
Non-current liabilities
Borrowings 553,435 474,692
Deferred tax liabilities 207 257
Deferred government grant 213,098 147,952
Long-term financial liabilities 5,429 4,989
Total non-current liabilities 772,169 627,890
------- -------
Current liabilities
Trade and other payables 402,827 537,003
Borrowings 548,385 586,425
Deferred government grant((1)) 17,833 26,924
Accrued liabilities 105,497 104,678
Promissory notes 14,895 14,791
Other financial liabilities 10 107
Current tax liabilities 85 143
Total current liabilities 1,089,532 1,270,071
--------- ---------
Total liabilities 1,861,701 1,897,961
--------- ---------
TOTAL EQUITY AND LIABILITIES 4,421,082 4,301,699
========= =========
Note:
(1) The Company made a reclassification of part of non-current deferred government grant to current liability as of June 30, 2013.
Semiconductor Manufacturing International Corporation
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In $US thousands)
For the three months ended
--------------------------
September 30, 2013 June 30, 2013
(Unaudited) (Unaudited)
---------- ----------
Cash flow from operating activities
Profit for the period 42,940 75,330
Depreciation and amortization 136,725 135,712
Share of profits of associates (551) (777)
Changes in working capital and others 90,467 (101,905)
------ --------
Net cash from operating activities 269,581 108,360
------- -------
Cash flow from investing activities:
Payments for property, plant and equipment (255,561) (188,008)
Payments for intangible assets (9,414) (14,914)
Payments for land use right - (61,391)
Proceeds from disposal of property, plant and equipment and intangible
15,140 7,553
assets
Changes in restricted cash relating to investing activities
7,305 (12,721)
Payments to acquire financial assets
(5,225) (2,852)
Proceeds on sale of financial assets
5,518 1,215
Proceeds from disposal of subsidiary
29,104 28,639
Others - (80)
Net cash used in investing activities (213,133) (242,559)
-------- --------
Cash flow from financing activities:
Proceeds from borrowings 434,170 306,939
Repayment of borrowings (388,671) (189,323)
Repayment of promissory notes - (15,000)
Proceeds from exercise of employee stock options
546 1,551
Proceeds from non-controlling interests 108,000 -
Net cash from financing activities 154,045 104,167
------- -------
Effects of exchange rate changes on the balance of cash held in foreign
59 55
currencies
Net increase (decrease) in cash and bank balances
210,552 (29,977)
Cash and bank balances, beginning of period
262,955 292,932
Cash and bank balances, end of period
473,507 262,955
======= =======
SOURCE Semiconductor Manufacturing International Corporation