2016 Q4 Financial Reports

MediaTek Inc. Reports Fourth Quarter 2016

Consolidated Results

Consolidated Revenue

MediaTek Inc. today announced financial results of fourth-quarter ended December 31, 2016. Fourth quarter revenue was NT$68,675 million, down 12.4% sequentially, and up 11.3% year-over-year. The quarter-over-quarter decrease was mainly due to seasonal decline in consumer electronics. The year-over-year growth was mainly due to increasing shipments in consumer electronics.

Annual revenue totaled NT$275,512 million, up 29.2% year-over-year.

Consolidated Gross Profit and Gross Margin

The fourth-quarter gross profit was NT$23,713 million, down 14.1% sequentially and 0.3% year-over-year. Gross margin for the quarter was 34.5%, down 0.7 percentage points sequentially and 4 percentage points year-over-year. The year-over-year decrease were mainly due to product mix and smartphone market competition.

Gross profit of the year amounted to NT$98,190 million (gross margin: 35.6%), up 6.5% year-over-year.

Consolidated Operating Expenses

Operating expenses for the quarter was NT$19,731 million (28.7% of revenue), compared with NT$19,995 million (25.5% of revenue) in the previous quarter, and NT$20,033 million (32.5% of revenue) in the same period last year. Operating expenses for the quarter were largely flat on quarter-over-quarter and year-over-year basis.

Operating expenses for the quarter included:

R&D expenses of NT$14,035 million (20.4% of revenue), decreased from NT$14,592 million in 3Q16, and decreased from NT$15,437 million in 4Q15.

Selling expenses of NT$3,675 million (5.4% of revenue), increased from NT$3,532 million in 3Q16, and increased from NT$3,599 million in 4Q15.

Administration expenses of NT$2,021 million (2.9% of revenue), increased from NT$1,871 million in 3Q16, and increased from NT$996 million in 4Q15.

Full-year 2016 operating expense was NT$75,114 million (27.3% of revenue), increased 13.3% year-over-year.

Consolidated Operating Income and Operating Margin

Operating income for the quarter was NT$3,981 million, down 47.8% sequentially, and up 6.2% year-over-year. Operating margin for the quarter was 5.8%, decreased from 9.7% in the previous quarter, and decreased from 6.1% in the year-ago quarter.

Operating income of the year was NT$23,076 million (operating margin: 8.4%), down 10.9% year-over-year.

Consolidated Non-operating Income (loss) and Income Tax

Non-operating income for the quarter was NT$1,586 million, or 2.3% of revenue. It was mainly from interest income and investment income recognized under the equity method. Income tax expense for the quarter was NT$430 million.

Non-operating income of the year amounted to NT$4,137 million, compared with NT$3,461 million last year.

Consolidated Net Income, Net Profit Margin and EPS

Net income for the quarter was NT$5,138 million, down 34.4% sequentially, and up 22.9% year-over-year. Net profit margin for the quarter was 7.5%, decreased from 10.0% in the previous quarter, and increased from 6.8% in the year-ago quarter. EPS was NT$3.23, compared with NT$4.98 in the prior quarter and NT$2.83 in the year-ago quarter.

Full year 2016 net income was NT$24,031 million, down 6.7% year-over-year. Accumulated EPS was NT$15.16 for the year, compared with NT$16.60 last year.

Consolidated Cash and Financial Assets-Current

Cash and financial assets-current at the end of the quarter was NT$149,385 million. This represents 41.5% of the company’s total assets. Cash and financial assets-current was NT$155,684 million and NT$166,898 million at the end of previous quarter and the year-ago quarter, respectively. Financial assets-current portfolio includes mutual funds, bonds and derivatives.

Consolidated Accounts Receivable

Accounts receivable (net) at the end of the quarter was NT$20,481 million. The accounts receivable turnover was 30 days based on quarterly average net receivables divided by annualized net revenue. The turnover was higher than 26 days in the last quarter and 24 days the year-ago quarter.

Consolidated Inventory

Net inventory was NT$33,923 million at the end of the quarter. The inventory turnover was 72 days based on quarterly average inventory divided by annualized cost of goods sold. The turnover was higher than 63 days in the last quarter and 70 days in the year-ago quarter.

Consolidated Cash Flow from Operations                 

Net cash provided by operating activities during the quarter was NT$9,209 million, compared with NT$3,170 million in the prior quarter and NT$18,164 million in the year-ago quarter.

Earnings Webcast

MediaTek will hold a public webcast today (January 26). A live webcast of the conference call will be available through the Investor Relations section of the MediaTek website. Investors who want to raise questions may use the toll number attached below.

  Schedule and Webcast Links:

In Mandarin  2:00 - 3:00 p.m. (Taiwan Time)   

http://wms.gridow.com/ir/mediatek/tw/mediatek_2016Q4_tw.html

In English    4:00 - 5:00 p.m. (Taiwan Time)

http://wms.gridow.com/ir/mediatek/en/mediatek_2016Q4_en.html

  Dial-in Number: +886-2-21928016   

Password: 195638#

About MediaTek Inc.

MediaTek Incorporated (TWSE: 2454) is a global fabless semiconductor company that enables 1.5 billion connected devices a year. We are a market leader in developing innovative systems-on-chip (SoC) for mobile device, home entertainment, connectivity and IoT products. Our dedication to innovation has positioned us as a driving market force in several key technology areas, including highly power-efficient mobile technologies and advanced multimedia solutions across a broad range of products such as smartphones, tablets, digital televisions, OTT boxes, wearables and automotive solutions. MediaTek empowers and inspires people to expand their horizons and more easily achieve their goals through smart technology. We call this idea Everyday Genius and it drives everything we do. Visit www.mediatek.com for more information.

 

MediaTek Inc.

Consolidated Income Statement

(In NT$ millions, except earnings per share)

    

4Q16

3Q16

4Q15

Q-Q

Y-Y

Net Sales

68,675

78,403

61,713

(12.4%) 

11.3%

Operating costs

(44,963)

(50,787)

(37,932)

Gross Profit

23,713

27,617

23,780

(14.1%) 

(0.3%) 

  Selling expenses

(3,675)

(3,532)

(3,599)

   Administration expenses

(2,021)

(1,871)

(996)

  R&D expenses

(14,035)

(14,592)

(15,437)

Operating Expenses

(19,731)

(19,995)

(20,033)

Operating Income

3,981

7,622

3,748

(47.8%) 

6.2%

Net Non-operating Income

1,586

993

997

Net Income Before Income Tax

5,568

8,615

4,745

  Income tax expense

(430)

(785)

(564)

Net Income

5,138

7,830

4,181

(34.4%) 

22.9%

EPS Attributable to the Parent(NT$)

3.23

4.98

2.83

Note: Numbers do not add up due to rounding.

Supplemental Information: Percentage of Revenue 

 

4Q16

3Q16

4Q15

Gross profit

34.5%

35.2%

38.5%

  Selling expenses

(5.4%) 

(4.5%) 

(5.8%) 

  Administration expenses

(2.9%) 

(2.4%) 

(1.6%) 

  R&D expenses

(20.4%) 

(18.6%) 

(25.0%) 

Operating profit

5.8%

9.7%

6.1%

  Non-operating income

2.3%

1.3%

1.6%

  Income tax expense

(0.6%) 

(1.0%) 

(0.9%) 

Net profit

7.5%

10.0%

6.8%

Note: Numbers do not add up due to rounding.

 

 

MediaTek Inc.

Consolidated Income Statement

(In NT$ millions, except per share amounts) 

    

2016

2015

Y-Y

Net Sales

275,512

213,255

29.2%

Operating costs

(177,322)

(121,076)

Gross Profit

98,190

92,180

6.5%

  Selling expenses

(12,414)

(9,326)

  Administration expenses

(7,015)

(7,417)

  R&D expenses

(55,685)

(49,529)

Operating Expenses

(75,114)

(66,272)

Operating Income

23,076

25,908

(10.9%) 

Net Non-operating Income

4,137

3,461

Net Income Before Income Tax

27,213

29,368

  Income tax expense

(3,182)

(3,600)

Net Income

24,031

25,769

(6.7%) 

EPS Attributable to the Parent(NT$)

15.16

16.60

 Note: Numbers do not add up due to rounding.

 

 

Supplemental Information: Percentage of Revenue

 

2016

2015

Gross profit

35.6%

43.2%

  Selling expense

(4.5%) 

(4.4%) 

  Administration expenses

(2.5%) 

(3.5%) 

  R&D expenses

(20.2%) 

(23.2%) 

Operating profit

8.4%

12.1%

  Non-operating income

1.5%

1.6%

  Income tax expense

(1.2%) 

(1.7%) 

Net profit

8.7%

12.1%

Note: Numbers do not add up due to rounding.

 

 

MediaTek Inc.

Consolidated Balance Sheet

 (In NT$ millions)

 

4Q16

3Q16

4Q15

Cash & Financial assets-current

149,385

155,684

166,898

Accounts receivable

20,481

24,331

16,195

Inventories

33,923

36,630

24,130

Other current assets

12,408

12,472

7,650

Funds and investments

30,120

25,461

22,814

Intangible assets

72,015

72,848

75,431

Other non-current assets

41,449

40,768

38,132

Total assets

359,781

368,194

351,250

Short-term loans

54,524

64,555

49,123

Accounts payable

24,630

30,219

16,156

Other current liabilities

40,174

39,381

35,987

Total non-current liabilities

3,586

3,921

2,896

Total equity

236,867

230,118

247,087

Note: Numbers do not add up due to rounding.

 

 

MediaTek Inc.

Consolidated Cash Flow Summary

(In NT$ millions) 

 

4Q16

3Q16

4Q15

Net cash provided by (used in) operating activities

9,209

3,170

18,164

Net cash provided by (used in) investing activities

(2,026)

(4,864)

(15,036)

Net cash provided by (used in) financing activities

(10,638)

(11,629)

(8,221)

Effect of changes in exchange rate on cash and cash equivalents

861

(2,663)

(743)

Net increase (decrease) in cash and cash equivalents

(2,595)

(15,985)

(5,836)

Cash and cash equivalents at the end of the period

141,349

143,944

153,280

Note: Numbers do not add up due to rounding.